This Bill is necessary to give legislative effect to the decisions of the Government announced by the Minister for Finance in his Budget Statement of 11th April last to increase the rates of non-contributory old age, blind and widows' pensions and unemployment assistance, to increase the rates of various social insurance benefits and pensions, to extend the duration of unemployment benefit and to increase the rates of social insurance contributions. In addition, the Bill includes a number of provisions designed to extend and amend the existing social insurance and assistance schemes in a number of ways. Some of these changes flow from developments in related fields, for example, the initiation of training schemes under An Chomhairle Oiliúna and the forthcoming introduction of a redundancy payments scheme; others, such as the modification of the trade dispute disqualification for unemployment benefit and assistance and the repeal of the special residence or employment test for unemployment assistance on persons moving into certain urban areas, are the outcome of re-examination of the problems involved.
The Bill is, of necessity, drafted mainly by way of amendments to the existing Acts. This method naturally tends to give rise to some difficulty in following the amendments which refer to existing provisions of the Acts without giving them in detail. I have endeavoured to have the explanatory memorandum issued with the Bill drawn up in such a way as to make clear what each amendment involves where the text of the Bill itself is not self-explanatory. I trust that Senators will have found the memorandum a help in their examination of the Bill.
The increases in the rates of payment on the Social Assistance side, which it is proposed to bring into operation at the beginning of next month, will mean an extra 5/- a week for all existing non-contributory old age, blind and widow pensioners. It is estimated that some 111,000 persons who are old age or blind pensioners will qualify for the increase and some 21,000 widows. These increases in the pension rates will enable the scale of means and rates of pension in each case to be extended to give an additional rate at the minimum of each scale payable to persons whose means are just outside the present means limit for any pension. The means limit, of course, rises automatically in respect of each qualified child.
The rates of unemployment assistance for persons in urban and rural areas are being incresed by 5/- a week for the recipient himself. A further 5/-will be payable where there is an adult dependant. These increases in rates of unemployment assistance at the maximum will have the effect of automatically extending the means limits for qualification for unemployment assistance by equivalent amounts, thus making eligible for assistance persons whose means are somewhat outside the present limits.
The increases in payments of Social Insurance benefits and pensions will come into operation at the beginning of January next and will provide an extra 5/- a week for recipients of disability benefit, unemployment benefit, maternity benefit, widows', contributory, pension and old age, contributory, pension with an additional 5/- a week where an adult dependant's allowance is payable with the pension or benefit. In addition, the Bill proposes to extend the period over which a person can draw unemployment benefit from the present maximum of 156 days to 312 days in the case of persons aged over 18 years, including certain married women.
The additional 156 days benefit will be payable at the normal unemployment benefit rates, as increased under this Bill, for persons who have good records of employment as measured by a yearly average of forty employment contributions paid over the preceding seven years. For those who do not have such an average, unemployment benefit will be paid in the additional period at rates equivalent to the appropriate maximum rate of unemployment assistance payable in urban areas as increased under the Bill.
The extra expenditure on these increased rates and extensions of the social insurance scheme makes an increase of the contributions payable by employers and employees necessary. As mentioned by the Minister for Finance in his Budget Statement, the taxpayer in this country is bearing a higher ratio of the cost of social welfare than in other countries mainly because assistance services, which are financed wholly by the Exchequer, represent a high proportion of our total outlay. Even in the insurance services, however, the Exchequer bears more than the one-third of the cost which it was the intention that the taxpayer would contribute to the Social Insurance Fund when the scheme was set up under the Social Welfare Act, 1952. In fact, in recent years the Exchequer contribution has been nearer to 40 per cent than 33? per cent. The Government have decided with a view to restoring the original ratio that the whole annual cost of the extension of the duration of unemployment benefit, £2,107,000, should be borne by employers and employees and that employers' and employees' contributions should cover more than two-thirds of the cost of the benefit increases in a full year. It is proposed in the Bill, therefore, to increase the rates of Social Insurance contributions where all the insurance benefits are involved, by 3/2d a week, shared equally by employer and employee with appropriately lesser increases where some only of the benefits are covered. The ordinary rate of men's contributions will thus be increased by 1/7d to be paid by the employer and 1/7d by the employee, making the total contribution 18/- a week shared equally by the employer and employee. To this must be added, of course, the 2/1d paid by the employer in respect of occupational injuries insurance. A table showing the present and proposed rates of contribution appears in the explanatory memorandum. The increase in voluntary contributions will be 4d in the rate covering widows' and orphans' pensions only and 9d. in the rate which covers also old age, contributory, pension. It is estimated, on the basis of this year's estimates of expenditure plus the extra annual costs and the expected yield of the increases proposed in contribution rates in a full year, that the Exchequer contribution would still be of the order of 35.8 per cent of the expenditure from the Social Insurance Fund.
As in the case of Social Welfare Bills introduced over the past few years, this Bill includes a number of provisions involving miscellaneous changes in the various schemes which have been found to be desirable and feasible.
The more important of these changes relate to the disqualification of persons disemployed by reason of a stoppage of work arising from a trade dispute at their place of employment. At present such people are disqualified for receiving unemployment benefit or assistance irrespective of whether or not they are involved in the dispute. It is proposed in the Bill, at sections 8 and 15, to modify this disqualification which has been the subject of considerable criticism for a number of years. The amendment proposed in the Bill has been agreed with the Irish Congress of Trade Unions on the understanding that the matter will be subject to review. The modification does not, of course, affect the position of persons who involve themselves in a trade dispute by refusing to pass pickets.
Another change also involves unemployment benefit and assistance. At present, a person who loses his employment through misconduct or who voluntarily leaves his employment without just cause or refuses an offer of suitable employment or who fails or neglects to avail himself of any reasonable opportunity of obtaining suitable employment may be disqualified for unemployment benefit for up to 6 weeks. The unemployment assistance code has a similar type of disqualification for up to three months. It is proposed—also in sections 8 and 15 of the Bill—that corresponding disqualifications should apply in the case of a person who without good cause refuses or fails to avail himself of any reasonable opportunity of receiving training provided or approved by An Chomhairle Oiliúna as suitable in his case.
Again, in regard to unemployment, assistance to persons moving from rural areas into certain urban areas is subject to the satisfaction of a special residence or employment test. This test has operated since the Unemployment Assistance Scheme commenced in 1934 and was introduced to discourage persons from moving from rural areas into those urban centres where the rates of unemployment assistance were at that time considerably more attractive. This argument is no longer of significance and the restriction of the free movement of workers is regarded as undesirable in the context of modern thought on the mobility of labour. In addition, it runs counter to the recommendation of the Commission on Itinerancy accepted by the Government that any difficulties in the way of payment of social welfare allowances to itinerants should as far as possible be eliminated. The special test is one such difficulty in the case of itinerants wishing to settle in urban areas and it is now to be removed by section 14 of the Bill.
A further change relates to the question of training courses provided by An Chomhairle Oiliúna. Under the Occupational Injuries scheme an apprentice is statutorily covered while attending such a training course, if his attendance is with his employers' consent or is required by his employers' or under his contract of service. Unemployed persons on the other hand attending such training courses are not in insurable employment for any purposes and consequently would not be covered against injuries suffered in the course of training. It is proposed in section 16 of the Bill to provide that unemployed persons attending a course of training provided or approved by An Chomhairle Oiliúna will be deemed while so attending to be insurably employed for occupational injuries purposes by An Chomhairle Oiliúna, who will pay the necessary insurance contributions.
Two other provisions of the Bill arise from the effect which the proposed Redundancy Payments scheme would have on those social welfare payments where there is a means test. In sections 12 and 13 it is proposed to disregard payments under the proposed Redundancy Payments scheme in the assessment of means for the purpose of non-contributory old age, blind and widows' pensions and unemployment assistance. The purpose of this is to ensure that payments under the Redundancy Payments scheme will not adversely affect a person's title to benefit under any of the various social welfare schemes.
The existing provisions of the Social Welfare Acts in relation to social insurance have been modified by regulations in the case of teachers in national schools, vocational schools and secondary schools who are employed in a permanent and pensionable capacity so that apart from occupational injuries insurance they are insured only for the purposes of widows' and orphans' pensions. Teachers employed in new comprehensive schools established by the Minister for Education are not covered by these modifications and there is no power in the Acts to enable them to be thus excepted from full insurance. It is proposed in section 7 of the Bill to remedy the position and to enable these teachers to be treated for social insurance purposes in the same way as national teachers, vocational teachers and secondary teachers.
The last of the miscellaneous provisions is to remove an undesirable effect which an entry into insurance for the purpose of occupational injuries insurance only could have on a person's title to old age or widows', contributory, pension. If such an entry into insurance were to be taken into account for pension purposes, it could adversely affect title to pension by diluting the effective pensions insurance over a period during which the person could not pay contributions for pension purposes. By providing that the entry into insurance for occupational injuries cases only will be ignored for pension purposes and that a person shall be regarded as entering insurance for pension purposes on the day on which he first becomes an employed contributor paying contributions which count for those purposes. Section 11 of the Bill will restore the position to what it was before occupational injuries insurance was introduced.
It might be helpful to Senators if I were to summarise the cost of the various proposals in the Bill. On the Social Assistance side the total cost will be £1,980,000 in a full year. The extension of the duration of unemployment benefit will result in savings on unemployment assistance estimated at some £1,500,000 in a full year but much of this saving will be required to meet the extra expenditure on unemployment assistance arising from the abolition of Employment Period Orders. The gross cost of the improvements in the Social Insurance Scheme in a full year will be £5,123,000 that is £3,016,000 on the increases in rates and £2,107,000 on the extension of the unemployment benefit scheme. Allowing for an increased annual income to the Social Insurance Fund of £4,380,000 to be raised from the increases in rates of contributions, the cost to be met by the Exchequer will be £743,000 in a full year.
I have much pleasure in recommending this Bill to Seanad Éireann and I would ask for a speedy and favourable consideration of it.