That Seanad Éireann approves the following Regulations in draft—
Social Welfare (Insurance Inclusions and Exclusions) Regulations, 1988
a copy of which Regulations was laid before Seanad Éireann on 22nd March, 1988.
Vol. 119 No. 4
That Seanad Éireann approves the following Regulations in draft—
Social Welfare (Insurance Inclusions and Exclusions) Regulations, 1988
a copy of which Regulations was laid before Seanad Éireann on 22nd March, 1988.
The purpose of these regulations is to extend social insurance cover from 6 April 1988 to ministers of religion, members of religious orders, doctors, dentists and certain employees of local and public authorities who are employed under a contract of service. This is necessary as a consequence of the extension of social insurance to the self-employed, which is being provided under the Social Welfare Bill, 1988, which will be debated by the House later today.
The persons concerned are specifically excluded from social insurance cover at present. This means that even if a person in one of these categories is employed under a contract of service, such as, for example, persons in Holy Orders who are teachers, nurses, etc. or doctors and dentists employed by hospitals, they are not covered for social insurance purposes. There are historical reasons for excluding these various categories but their position has to be reviewed in the context of the new situation where social insurance is being extended to the self-employed. Continuing to exempt these categories from social insurance as employed persons could not be justified when their colleagues who are in self-employment are being brought into the new extended system.
The reason for the general exception of religious from social insurance cover stems from the fact that it was felt that persons in Holy Orders or in religious life are not regarded as employees in the accepted sense when carrying out the work or duties of their offices, even though some are paid stipend or salary.
Under arrangements made in 1974, certain classes of ministers of religion or other members of religious communities can be brought into the social insurance system where a representative body requests that their exclusion is unreasonable having regard to other similar occupations and the Minister is satisfied that this is the case. On foot of this provision ministers of the Church of Ireland were brought into social insurance at the class E rate of PRSI contribution in respect of their pastoral employment and are accordingly covered for all social insurance benefits, with the exception of unemployment and occupational injuries benefits. No other group of clergy or religious has made representations since 1974 for inclusion in the social insurance system.
Under the new extended social insurance system for the self-employed as provided for in the Social Welfare Bill, 1988, clergy and other religious who have income which is assessable to income tax will become compulsorily insured for old age and widow's and orphan's pensions and will be liable for the payment of self-employment contributions on such income. It would, therefore, be clearly anomalous to continue to exclude those clergy and religious who are employees from compulsory social insurance i.e., religious employed in schools, universities, hospitals, etc. These regulations now provide for their inclusion in the social insurance system in the same way as other employees. This is in line with the recommendations of the Commission on Social Welfare in the matter.
In addition to ministers of religion, employed persons who are doctors or dentists and certain local and public authority employees are also being brought into the social insurance system for the first time. Such categories have been excluded from compulsory social insurance since 1953, when the unified social welfare system was established. In the case of medical and dental practitioners it was felt that they would only be in employment for a very short time as the majority would go into private practice after a few years and, therefore, it was decided that it would be inequitable to impose a social insurance liability on them for a short period for which they would not derive permanent benefit.
Social insurance cover was extended to doctors and dentists in the Defence Forces in 1985. This was, of course, by request. It was felt at that time that the question of extending social insurance cover to other doctors and dentists employed, for example, those employed by health boards and other local and public authorities should be considered in the context of extending social insurance cover to all doctors and dentists, including private practitioners. Doctors and dentists who are in private practice are now being brought into the social insurance system as self-employed contributors under the provisions of the Social Welfare Bill, 1988. As a consequence, it would be anomalous to continue to exclude all medical and dental practitioners who are employed under contract of service from compulsory social insurance and these regulations also provide for their inclusion in the same way as other employees. This also is in line with the recommendations of the Commission on Social Welfare.
The rate of PRSI contributions payable by such employees will be determined by the nature of their employment. For example, doctors employed under a contract of service by a health board in a permanent and pensionable capacity will pay the PRSI class D contribution which will cover them for widow's and orphan's pensions, deserted wife's benefit and occupational injuries benefit.
Part I of the First Schedule to the Social Welfare (Consolidation) Act, 1981, specifies the employments which are insurable under the Social Welfare Acts. Part II of that Schedule specifies employments which are excepted from being insurable. The purpose of these regulations is to delete references in Part II to employment where the employed person is a minister of religion or a member of a religious community, employment as a doctor or dentist and certain employees of local and public authorities. The deletion of these categories from the list of excepted employments means that, where they are employed, they will automatically fall into Part I of the First Schedule, thereby becoming covered for social insurance as employees.
The existing paragraph 12 of Part I of the First Schedule which refers to ministers of religion is being deleted as it is no longer relevant in the present context. However, it is being replaced by a provision which will designate clergy and other religious as a specific category of employee. This is necessary in order to maintain the current class E status of those ministers of religion who are already included in the system and it will also enable the provisions of the Social Welfare Acts to be modified in respect of this category of persons should this be necessary in the future.
It is estimated that approximately 9,000 employed persons will be brought into the social insurance system as a result of the provisions in these regulations.
Under subsection (6) of section 5 of the Social Welfare (Consolidation) Act, 1981, these regulations may not be made until a resolution approving the draft regulations has been passed by both Houses of the Oireachtas. A draft of these regulations has already been approved by Dáil Éireann and I am happy to recommend the draft regulations for the approval of Seanad Éireann.
I welcome these regulations which extend the PRSI system to people who hitherto were exempt, although we may be giving the impression to people who already pay a very high amount of PRSI that we are including others within the system who can well afford to obtain insurance cover elsewhere. I recognise that this change is necessary in regard to ministers of religion, but there is an impression that doctors, dentists and people involved in the educational system did not avail of the opportunity to make voluntary contributions within the PRSI system. It was pointed out to me some time ago that some people did avail of this opportunity and they now are entitled not only to a pension from their college but to a social welfare pension as well.
It must be recognised that some employees have not been getting the same benefits as others. I refer to doctors or dentists employed by health authorities who could not make as much money as those working in private practice. The Minister seems to be adopting a policy of getting as many people as possible to give the State money in return for some type of benefit. PRSI payments should be included as part of taxation payments. There should not be two different payments.
Dentists and doctors employed by health boards or voluntary hospitals are making a lot of money. Should we be providing that everybody should pay a percentage of earnings into the PRSI system? We should change that and say that it is a social and health contribution rather than a PRSI contribution. We now recognise that these people should be brought into the scheme because they do not have these benefits already. In fairness, I think the Minister will admit that many of the people who are employed by the health boards and hospitals are making a lot of money. Some of them make a lot more than the ordinary person who is at present paying the PRSI contribution. Many of the people who are earning more than £17,000 naturally have health cover already through the VHI scheme.
Is it not about time that we recognised that everybody should pay the same amount and, if they wish, they can have their cover through the VHI? Is it not about time that everybody who is working should pay so much every week? We should certainly provide cover for the people who cannot do so, which is my main concern. We should say to the people who are earning over £10,000 should have so much per week deducted and also pay their own health contributions. The person who earns £3,500, £5,500 or £7,000 by working part time should not have to pay for cover at the same rate as the person who earns £40,000. Some people make £40,000 a year and the Minister knows that because every second day he sees common contracts between people and health boards and voluntary hospitals.
We are now saying to these people that they will get the benefits when they retire if they now pay the contributions. People who earn that kind of money naturally have very good pension schemes already and I do not see why we should be in a desperate hurry to include them in this scheme. Some people in the educational system paid in contributions through the self employed scheme over the years and they now have massive pensions as well as State pensions, to which they are rightly entitled. Under the Small Dwellings Act a person who earns less than £10,000 per year is entitled to a loan and perhaps the same system should apply in the health area. Everybody in the State should make a contribution of £15 per week but if they earn over £10,000 they should not get any cover.
I resent very much the fact that medical people and dentists in particular should get this cover. Many of these people earn a lot of money and yet we are giving them cover. These regulations cover people who are employed by the State, in voluntary hospitals and health boards. The doctors who work in these areas make a lot of money and now we are making another system available to them. If a person earns £20,000 and over he should not be entitled to any benefit. Would the Minister consider having two categories, so that people who earn under £10,000 a year get the benefits and people who earn over that sum have to pay for themselves?
The Minister might say that we would not get enough money in this way. The doctors and dentists who were trained by the State and cost the State a lot of money are now getting all the benefits again. I do not wish to include religious people in this because they are a different sector. They do not make money and I congratulate the Minister on at last recognising this fact.
Not all of them.
In fairness, a lot of them do not make money. The person who is earning £100 a week costs his employer approximately another £44 per week in contributions. Why should the better off people get the same benefits as those who cannot afford to go sick? Generally, better off people do not suffer as much ill health as the less well off people who have to go out and work for their money every day.
I welcome the regulations. The Minister should consider introducing a scheme whereby everybody who is employed should pay so much a week. I welcome the inclusion of the farmers in this scheme. The collection of this contribution will be very hard but that is another argument. The State should be prepared to take so much from everyone but if a person is within a certain category he should have to cover himself. We should broaden that area.
I welcome the Social Welfare (Insurance Inclusions and Exclusions) Regulations, 1988. The Minister said that the purpose of these regulations is to extend social insurance cover from 6 April 1988 to ministers of religion, members of religious orders, doctors, dentists and certain employees of local and public authorities who are employed under a contract of service. He said that in the past there were historical reasons for excluding people such as those in Holy Orders from the scheme. This was the correct approach because in the past many of these people gave their services voluntarily in the interests of providing health and educational services. They were in no position to contribute anything. Because many of them are now employed by health boards and in the educational area they are earning a salary, which is paid for by the State, and it is only right that they should be included under these regulations. Many of those people found it difficult to retire because they had nothing to retire to but once this system is in operation they will be able to retire the same as everybody else. It is very important that they are included in this scheme. I congratulate the Minister on his foresight in looking at this very important aspect and bringing it before the House.
I welcome these regulations. Many doctors and dentists who are in retirement are, through no fault of their own, in poor circumstances. It is only when people do not have a constant income coming into a home when they are in retirement that they find that their savings dwindle very fast. Under these regulations doctors, dentists and religious people will now have an opportunity of having proper pension cover, which is a very basic need and a major advantage.
I am speaking of doctors who, during their time in the health services, train to become general practitioners and then go to work in that area. Under the new legislation dealing with the self-employed they will be paying PRSI as general practitioners and their years of employment in the health service, whether in hospitals or at general practitioner level, will be insurable.
As far as the religious community are concerned, these people are entitled to proper pension cover at retirement because many of them spend all their working lives caring for others, sometimes in hospitals They are entitled to a guarantee, as a right, of a pension in their later years. Many religious working in hospitals and schools have a very low stipend or income during their working lives and do not have an opportunity to save for later years. I am glad they are being included in the PRSI scheme.
I accept the principle of broadening the contribution base for PRSI contributions. As the Minister pointed out, the provisions are in line with the recommendations of the Commission on Social Welfare. There are areas relating to contribution levels which would probably be more appropriate to the debate on the Social Welfare Bill, but there is one question I would like to put to the Minister. Will the aggregated contribution from the new contributors cover the expected level of benefit to which these contributors may become entitled?
I, too, welcome the regulations which bring into the social insurance scheme people who up to now were not covered. As was mentioned earlier, there are a number of categories being taken into this scheme where the people concerned would be capable of looking after themselves but that can be debated when we are looking at the Social Welfare Bill. However, there are other categories who will benefit from it.
I am glad to see the anomaly relating to the religious has been removed, I am thinking particularly of religious who were teaching, who were contributing most of their salaries to the religious orders, and the clergy who have to live on their stipend. Especially in the Dublin area, the clergy have been sharing their salaries through a common fund with their colleagues working in less well off parishes. This is a very generous gesture. I would like to see all these people being entitled to equal cover under the social insurance scheme.
As I said, there are other categories which I do not believe need to be included in the scheme, but I will speak further on that when we are discussing the Social Welfare Bill.
I also welcome these regulations but I want to put one question to the Minister. What definition is the Minister putting on "ministers of religion" and "members of religious orders"? For most people there would be no difficulty with that at present, but at these lines might become important. Again, I welcome the regulations.
I thank Senators for their welcome for the regulations. I will answer Senator Haughey's comments first as they are fresh in my mind. The definition covers persons who are ordained in Holy Orders. Maybe we could have a debate on that another day, but so far we have never had much difficulty in recognising such people. I agree with the Senator that at some stage in the future we might be concerned about persons coming under this heading. However, that is the definition in the legislation and it has been reasonably successful up to now.
While welcoming the regulations Senator Cregan went into the broader issue of social insurance generally, and in particular the kind of cover we are giving. I agree that some of the people involved may have higher incomes than the limit mentioned. As Senator Wallace said, many religious are paid a stipend and I welcome the opportunity to give them a measure of security for the future. A good point is that this does not involve any State interference, it is a right they have as individuals. In that sense there is no State interference in the life of religious persons and they will have a pension as a right. Senator Cregan spoke about the health service. The health service is interesting in that context because if a person's income is over the limit he is entitled only to a bed in a public ward. Under the payments made, a person is entitled to a minimum service, irrespective of income, that is, a bed in a public ward. If a person's income is low, he is entitled to a consultant and treatment——
In the public service generally?
Yes, in the public area.
The Minister, without interruption, please.
The basic principle is that we are providing a social insurance system and social security for persons during their working life, whether self-employed, employed under contract of service or as employees. We are attempting to move towards a national pensions scheme and the National Pensions Board are examining that proposition and the other areas that would have to be included. The regulations cover what could continue to be an anomaly.
Senator Cregan visualised a case of a person with sufficient income to provide himself with a good pension while, at the same time, getting a State pension. The one equalising factor is tax. Pensions are taxable. Maybe Senator Cregan is visualising a time when pensions will not be taxable but——
He gets a tax benefit on his private pension.
The Minister does not need assistance in replying.
When the State pension is paid, there is a tax factor on the income. Senator O'Shea said he did not want to get into the wider area, but he wanted to know if the income would meet the total cost. The short answer to that is "yes". We can discuss that further when debating the substance of the Social Welfare Bill. In the course of my contribution to the debate on that Bill I will explain in more detail the Government's thinking on that and why they took that decision.
I was pleased to hear Senators welcoming the extension of the scheme. I should like to tell the House that the number of ministers of religion who are engaged in the health services as medical or social workers is 1,900. A total of 3,400 ministers of religion are engaged in teaching. I should like to tell the House that the number of doctors and dentists, who would be junior hospital doctors, consultants and dentists, is 3,800 and there are 85 coroners and registrars. They are the categories of people involved and their position would be anomalous given the fact that everybody else will be covered either as self-employed or as employees. I would prefer if the House deferred a substantial debate on that issue to later when we are considering the Social Welfare Bill.
Senator Haughey asked a very interesting question about the definition of "religious". The Minister in his response said that according to the Act it was religious who had received Holy Orders. Will the Minister not accept that there is an anomaly there in that many religous do not receive Holy Orders? There is no doubt that they make a very good contribution to society and I should like to ask the Minister to consider amending the Act to include religious irrespective of whether they have received Holy Orders.
Did the Minister say that a consultant employed by a health board or a voluntary hospital must be engaged on a full time basis or must he or she be subject to the common contract for a specific number of hours per week? I am concerned about that matter. We are all aware that consultants engage in private practice and while they may be working for the State for 20 or 30 hours each week they can make a lot of money in the other ten or 20 hours.
Their private work would be subject to the contribution rate of the self-employed. They would have to pay up to the new ceiling. The whole system is based on that ceiling which will be £16,200. What the ceiling will be in the future is a matter for the Oireachtas. This is an income-related scheme up to a specific ceiling and consultants would pay under their contract and under the self-employed scheme. I must point out to the House that everybody will be included in the scheme, that we cannot exclude certain categories.
I am sure the Minister is aware of the amount of money such consultants are earning in private practice.
The Senator will have an opportunity of raising this issue in the comprehensive Social Welfare Bill which will be dealt with later today.
I should like to tell Senator Doyle that the question of whether a person received Holy Orders is a matter for a legal adviser. There has not been any problem with that definition to date. Should a problem arise it will be left to the legal adviser to decide and if the legal adviser is not in a position to deal with it the Minister will have to change the regulations or introduce new regulations. As I told Senator Haughey, problems may arise in the future in regard to that definition.