I fully appreciate that. It is for the convenience of Members that I have included these other matters.
This Bill is substantial, comprising seven parts and 51 sections. This makes it the largest piece of new social welfare legislation in almost 40 years since the Social Welfare Act, 1952, which established the social welfare system as we know it.
The Bill continues the Government's policy of sustained improvements in social welfare by more than maintaining all payments against inflation; giving special increases to those on the lowest payments; introducing many improvements in existing schemes; introducing a number of major new schemes and services, and improving the effectiveness of the delivery of our services, including the new appeals system.
Two years ago, we extended social insurance to the self-employed which was an historic development in social security coverage. Last year, we introduced a new social assistance scheme for widowers and deserted husbands. This year, we are introducing two important new schemes — a carer's allowance and a lone parents' allowance.
The Bill includes provision for a number of major and innovative developments in social welfare legislation — the new carer's allowance and new lone parent's allowance, which I have already mentioned, and the establishment of the new Social Welfare Appeals Office. Other innovative measures being introduced this year include: a special clothing allowance to help social welfare recipients to provide for their children's school and winter clothing which will come into effect in September; improvements in the means tests including, in particular, an exemption of income from the sale of a pensioner's residence in certain circumstances and an exemption of payments to persons who accommodate students of Irish during the summer months, and changes in the "free" schemes which will enable a companion to travel free with a recipient of disabled person's maintenance allowance who cannot travel alone. This will be of major benefit to people in this situation and will especially benefit the mentally handicapped.
In last year's Social Welfare Act I provided that the prescribed relative's allowance could be paid directly to the person who provides the care. Now we are going further to provide for the first time for a separate carer's allowance. This is a milestone in the development of our social welfare services.
For the first time in our legislation we are giving official recognition to the role of the carer who provides full-time care for elderly people in the community. We are at last recognising the "forgotten army" of carers, mainly women, whose selfless dedication has been of inestimable value to the community over the years.
From my own experience working in my own community, I have always been very conscious of the work of carers and I am very proud, as Minister for Social Welfare, to be in a position to introduce this new scheme which represents much needed reform in this area. The development is also in line with the views of the Commission on Social Welfare which recommended that carers should be entitled to receive a social assistance payment in their own right.
The new allowance will be £45 per week and some 8,000 carers are expected to benefit under the new scheme. This compares with the existing prescribed relative's allowance of £28 which only applies to 2,000 caring relatives. For those who already had the prescribed relative's allowance, the new allowance provides an increase of £17 per week. For others, it provides a new payment of £45 per week. The greatest gains go to those cases where the carer was hitherto receiving no payment at all because of the various restrictions attached to the prescribed relative's allowance.
The new allowance will be subject to a means test. In introducing this new scheme, my purpose is to direct available resources to those who need them most. The new scheme does this. I am pleased to tell Senators that many of the restrictions which apply to the existing prescribed relative's allowance will be dropped when the new allowance comes into force. These provisions will be made by regulations. For the first time married people living with a spouse will qualify. For the first time persons other than relatives will qualify. These are major achievements.
The position of people who are at present receiving the prescribed relative's allowance will be protected. If, due to the means test, a person getting this allowance would get a lower rate on the new carer's allowance, they will be able to retain their existing prescribed relative's allowance.
I am conscious of the needs of carers who are looking after people receiving disabled person's maintenance allowances from the health boards. I was pleased, therefore, to be able to put down an amendment on Committee Stage in Dáil Éireann which gave me the necessary power to extend the scope of the carer's provision. I can now, by regulation, include persons who are providing full-time care for DPMA recipients in certain circumstances. It is my intention to exericse that power in the context of the transfer of responsibility for the DPMA scheme to my Department. This extra provision was welcomed on all sides of the House.
I am also introducing a new allowance for lone parents which will mean that for the first time there will be a single means tested payment for all lone parents with at least one dependent child. I would like to highlight a number of aspects of this scheme.
In the first instance, it formally recognises that all parents bringing up children on their own face similar problems. The social welfare system must treat all families in a similar manner whether the lone parent is a man or woman and regardless of the circumstances giving rise to their situation.
Currently, the needs of lone parents are created for by six different schemes. The supplementary welfare allowance scheme also caters for a number of persons who cannot qualify for existing schemes. The new scheme which I am now providing for in the Bill will streamline all existing social assistance payments for lone parents. It will incorporate the existing schemes for unmarried mothers, widowers and deserted husbands. Women receiving widow's (non-contributory) pension, deserted wife's allowance and prisoner's wife's allowance, who have child dependants will also be covered by the new scheme.
The new scheme represents a landmark in legislation in relation to one aspect. For the first time ever, it provides a special means tested social welfare payment for separated spouses, unmarried fathers and prisoners' husbands. Up to now the only social welfare payment available to lone parents in these circumstances has been supplementary welfare allowance.
The new allowance will apply to lone parents who are bringing up at least one dependent child on their own, satisfy a means test and are not cohabiting, that is, living with another man or woman as husband and wife. Children can be regarded as dependants until they reach the age of 18 — or 21 if they are in full-time education — and the means test will be the same as that used for the widow's (non-contributory) pension and is designed to allow for a certain amount of part-time work.
I am delighted to be able to bring in this new scheme which is a significant achievement in the development of a non-discriminatory social welfare allowance for lone parents who are unable to provide for themselves. It is also a major step for my Department in rationalising the number of schemes catering for persons with similar means.
The third major initiative for which provision is being made in the Bill is the improved social welfare appeals system. At present appeals are made to me as Minister for Social Welfare and are heard by appeals officers of my Department who are independent in the exercise of their functions. Nevertheless, the fact that the appeals branch is linked to my Department has been the subject of criticism. I am taking measures to clearly separate the appeals function from the Department by setting it up as a separate executive office.
Under the new arrangements, appeals will be made direct to the chief appeals officer and the appeals office will deal with all aspects of appeals. I will be providing that in future claimants whose appeals are refused will get information about the reasons for refusal and will be encouraged to seek any additional information they require as a basis for their appeal.
Appeals officers and the chief appeals officer will be appointed by the Minister for Social Welfare. Individual appeal officers will retain the discretion to decide whether appeals are dealt with summarily or by oral hearing. However, I am also providing that the Minister for Social Welfare and persons designated by him will in future have the power to direct that an oral hearing be allowed where it is warranted. The new office will produce an annual report on its activities. I inserted this requirement, by way of a Committee Stage amendment, during the passage of the Bill through the Dáil.
Information on the operation of the appeals system is currently provided in the reports published by my Department every two years. An essential function of the new Social Welfare Appeals Office will be the publication of a report on its own activities. The Commission on Social Welfare recommended the publication of such an annual report. The commission recommended that the report should give details not only of the number of appeals received and decided by category, but also on the outcome of decisions. In addition to those details, the annual report should contain some commentary on trends in appeals; the reason for the incidence of certain types of appeals; an analysis of the need for legislative change to remove anomalies and inequities; and, where necessary, the implications of its decisions for policy making generally in the Department.
I fully endorse the commission's recommendations in this matter and I consider that the information provided would be very useful in monitoring and assessing the effectiveness of not only the new appeals office, but also my Department's decisions process. The publication of an annual report will make an important contribution to public confidence in the new Social Welfare Appeals Office as well as emphasising its independent status.
The new appeals office will be a separate office headed by a director and chief appeals officer. It will have its own manager and secretarial staff. Already the chief appeals officer has been appointed. Its headquarters in D'Olier House will include private rooms for the hearing of appeals. Work on the refurbishing of office accommodation will commence within the next few weeks. I expect the new office to be fully operational by the late summer.
The changes I am now making will maintain the independence of the appeals system and ensure that it is perceived to be fair and independent. They will also fulfil the undertakings contained in theProgramme for National Recovery with the social partners, and in the Programme for Government.
Before going on to describe the main provisions in this Bill, I would like to take the opportunity to respond to the views that are constantly being perpetuated in the media and elsewhere about the extent of poverty in this country.
The most commonly quoted view is that one third of the population is living in poverty. This figure is the result of a gross distortion of the work which the Economic and Social Research Institute have done in examining the extent of poverty in Ireland. The ESRI approach is to establish relative poverty lines and to estimate the number of individuals falling below these lines. The amount of poverty depends on which poverty line you choose. For example, the ESRI estimated that only 13 per cent of individuals fell below a poverty line equivalent to 40 per cent of mean household equivalent income.
Moreover, even these figures are incomplete in a number of respects: first, the ESRI took account of cash income only and did not take into account the substantial benefits-in-kind afforded to the less well off, through for example education and health services; second, the survey was undertaken at a time when farm incomes were temporarily depressed, thereby over-estimating the level of poverty in rural households; third, the survey was carried out in 1986-87 since when, thanks to the efforts of this Government, the economy has experienced a rapid rate of growth, and the level of unemployment has declined. A key finding of the ESRI report was that families where the head of household was unemployed were at greatest risk of poverty; the substantial progress in reducing unemployment and increasing employment has undoubtedly increased the living standards of the poorest sections of the community over the last two years; and, finally and most importantly, since the survey was carried out I have made substantial increases in the level of support to those who rely on social welfare.
I want to make it clear that the interpretation put on the ESRI report by pressure groups is totally misleading, was never true and is becoming increasingly irrelevant due to the substantial economic and social progress which this Government have made.
This leads me to another area of interest to the commentators, namely the recommendations of the Commission on Social Welfare and the extent to which they have been implemented. Let us be clear about what the commission actually recommended. It made four main recommendations which were to improve the basic payments, to improve child income support, to broaden the social insurance base, and to improve the delivery of services.
Without exception, substantial progress has been made on each of these issues: the level of expenditure devoted to improvements over the past three years and the rate of increases granted represent substantial progress towards the commission's recommendations on basic payments. In fact, the 1990 equivalent of the priority rate recommended by the commission is £53 which has now been achieved in the case of all old age and lone parents pensions and almost so (£52) in the case of long-term unemployment assistance and disabled person's maintenance allowance; child dependant rates have been reduced from 36 to six and a minimum child benefit of £11 per week has been introduced. In addition, child benefit has being increased this year; the social insurance base has been extended to include the self-employed who are now making a significant contribution to the financing of the PRSI pension system — £62 million this year. I have asked the National Pensions Board to consider the question of extending coverage under the scheme to include invalidity pension and I am looking forward to their report later this year; and major and ongoing improvements continue to be made in the quality and delivery of social welfare services, as witnessed by the programme of expenditure on improvement of employment exchanges and by increased computerisation of services. In addition, two measures included in this Bill which I have already spoken about — the introduction of the new carer's allowance and the setting up of the new Social Welfare Appeals Office — are specifically in line with the commission's recommendations.
As Senator's will be aware, a limit of £50 applies on the amount of earnings which spouses may have and still be regarded as dependants for the purposes of social welfare payments to their wife or husband. This limit was introduced in 1986 as part of the equal treatment arrangements which precluded persons from being regarded as a dependant if they were themselves either in receipt of a social welfare payment or were at work. The total exclusion of persons at work was subsequently relaxed by allowing persons with earnings up to £50 a week to qualify as adult dependants.
I recognise that wherever the limit is set there will be difficulties for spouses of social welfare recipients whose spouse has earnings just below the threshold because an increase in earnings which brings them over and the threshold will result in the loss of the adult dependant allowance. This is one of the matters which is being addressed by the working group which I established last year to look at the treatment of households under the social welfare system, with particular reference to the equal treatment arrangements.
Following the report of the working group, which I expect shortly, there will be an opportunity to examine again the equal treatment arrangements and see whether a different approach would be more appropriate. In the meantime, however, I am happy to say that the Government have approved an increase from £50 to £55 in the limit and this will come into effect as soon as the necessary arrangements can be made. I know that this increase will be welcomed by persons in this situation and by the trade union movement which has made representations to me in this regard.
One of the difficulties arising here is that with the increases which have been awarded under theProgramme for National Recovery, some of these people have come just above the £50, whereas they were just below it previously. This will be very important to them, particularly in areas like the cleaning industry, for instance, to enable them to continue to be regarded as dependants of their spouses. That is quite an important development from their point of view.
I would also like to take the opportunity to refer to the transitional alleviating payments of £20 and £10 which were introduced in 1986 to cushion people who lost the adult dependant increase as a result of the equal treatment arrangements. As Senators will know, the intention then was that the payments would last for a maximum of one year. However, we have kept these payments with small reductions each year ensuring that when account is taken of social welfare increases nobody suffered a reduction in their payments.
This year the same arrangement will apply. The alleviating payments, which currently stand at £16 and £8, will again be reduced by £2 and £1 with effect from July. Where account is taken of the increases in payments generally and particularly of the higher increases for persons on the lowest payments, the people concerned will still enjoy substantial increases in the payments being made to them.
Over the past two decades, there has been a substantial increase in OECD countries in the proportion of the work-force engaged in part-time employment. Ireland is not exception in this regard, although part-time employment is still less prevalent here than in most other countries. However, it may be anticipated that with the growth in service industries, in particular, part-time working will become more widespread. This development creates problems for the social insurance system, which was designed largely with the full-time worker in mind.
I have been concerned for some time about the exclusion of some part-time workers from social insurance and with the consequential anomalies which can arise. I have, therefore, requested my Department to undertake a thorough review of the question of extending social insurance to part-time workers, especially with a view to eliminating the anomalous situations which have arisen. The question is a complex one because of the need to ensure that workers make at least a minimal contribution towards benefits, that entitlement to benefits does not create a disincentive to work and that the system of social insurance contributions is an equitable and administratively simply one.
I expect to have the results of this review by mid-summer. I have also requested the National Pensions Board to examine the question of the pension entitlements of part-time workers and I intend to draw on both reports for policy changes in this area. Any changes to the insurability of part-time workers will have implications for employers as well as employees and I intend that the social partners will be fully consulted.
In addition to the specific measures provided for in the Bill, I am introducing a number of other improvements, as follows: A new clothing allowance to help social welfare recipients to provide for their childrens' school and winter clothing. Three million pounds is being provided for the scheme which will come into operation in September; the free travel scheme will be altered as soon as possible this year so as to allow recipients of disabled person's maintenance allowance who cannot travel alone to bring a companion when availing of the free travel concession. This will help physically and mentally handicapped people to utilise the free travel concession more fully; elderly pensioners over 80 years of age will be allowed to retain their entitlement to free electricity allowance when people come to live with them; invalidity pensioners who transfer to retirement pension on reaching 65 years of age will no longer lose their entitlement to the free schemes; free scheme entitlements will be extended to all social security pensioners of states with whom Ireland has signed bilateral social security agreements. We signed one with Austria quite recently and are at an advanced stage in making arrangements with the USA and Australia. These will be very important to us given the number of people emigrating to these countries and wanting to retire or come back to work here. The national fuel scheme is being extended to households where a long-term social welfare recipient lives with someone on short-term unemployment assistance or supplementary welfare allowance and to smallholders receiving long-term unemployment assistance who are living alone. This is the first time the free fuel scheme has been extended to smallholders in these circumstances. This point seems to have been missed in the other House.
The total value of the social welfare increases and related measures announced in the budget is £100 million this year and £216 million in a full year. Total social welfare spending this year will, as a result, increase to £2,764 million which is equivalent to £7.5 million for each day of the year. That level of spending on social welfare is the highest ever in the history of the State. It demonstrates once again our continued determination to protect and improve the position of those dependent on our social services.
The measures provided for in this Bill include: an increase in general of 5 per cent in social welfare weekly rates of payment with special increases of up to 11 per cent for 16 different groups of welfare recipients, mainly those on the lowest payments. This is the first time that these have been extended to groups other than those on the very lowest payments. Sixteen groups will get special increases this time; further streamlining of the rates for child dependants, reduced now to six compared to 36 in 1987, with an increase to £11 in the minimum weekly payment; an increase of 5 per cent in the monthly rates of child benefit; replacement of the existing prescribed relative's allowance by a new carer's allowance which will be payable on a means-tested basis to a wider range of persons providing full-time care and attention to pensioners; introduction of a new lone parent's allowance for parents bringing up children on their own which will streamline all existing social assistance schemes for lone parents and which will include, for the first time, lone parents such as separated spouses, unmarried fathers and prisoner's husbands; measures to facilitate the establishment of the new social welfare appeals office; a major initiative to relieve those on low earnings of their liability for PRSI contributions while preserving their entitlements to benefits and pensions; improvements in means-testing which will exempt the income from the sale of a pensioner's home in certain circumstances and the income received by mná tí living in Gaeltacht areas who accommodate Irish students; new arrangements involving the integration of the redundancy fund and the occupational injuries fund with the social insurance fund.
The increases in payments are provided for in sections 3 and 4 of the Bill. In general, social welfare payments are being increased by 5 per cent. Since the rate of inflation is likely to be of the order of 3 per cent for the year mid-1990 to mid-1991, the position of all claimants is more than being maintained. Indeed, special increases are being provided for 16 different groups and these increases are as high as 11 per cent in some cases thus more than meeting our commitments in theProgramme for National Recovery.
The main improvements in rates are: an increase of 5 per cent generally in the weekly rates of social insurance, social assistance and occupational injuries benefits; a 10.6 per cent increase in the personal rates of long-term unemployment assistance and single woman's allowance; special increases of between 7 per cent and 15 per cent in the rates for adult dependants of the unemployed and those on supplementary welfare allowance. The new adult dependant rate for all of these payments will be £31 a week from July; an increase of £4, 8.2 per cent, a week for widows, widowers, deserted wives-husbands, unmarried mothers and prisoner's wives, under age 66 on social assistance means-tested pensions or allowances; a 6 per cent increase in the personal rate of the old age non-contributory pension; almost a 7 per cent increase, £3.50 per week, for widows and deserted wives under age 66 receiving contributory payments; an increase of 7 per cent in the personal rate of short-term unemployment assistance and supplementary welfare allowance; and a £3 a week increase in the personal rates for those receiving disability and unemployment benefit.
An increase of £5 a week has been provided for in the personal rate of unemployment assistance in line with the Government's continuing commitment to improving the position of the long-term unemployed.
Further increases in the adult dependant allowance and in child dependant payments will substantially improve the position of families depending on long-term unemployment assistance. From July, a couple with three children will receive an increase of £9 bringing their payment to £116 a week. These latest increases will mean that the rate of payment for these families has been increased by almost 30 per cent since July 1986.
This year, new categories have been included in the special increases. An old age pension couple, both over age 66, will receive £106 a week, an increase of £6, while a widow under age 66 with two children will receive an increase of £5.20, bringing her new rate to £80 a week.
This year sees a continuation of our policy on streamlining the different rates for adult and child dependants. This Bill provides that, in future, there will be only one adult dependant rate for the unemployed. The new rate will be £31 from July and will apply to all unemployment payments and also to disability benefit. This new payment means an increase of £4.10, or 15.2 per cent, for adult dependants of those on short-term unemployment assistance or supplementary welfare allowance and an increase of £2, or 6.95 per cent, for those on disability benefit, unemployment benefit or long-term unemployment assistance.
This year I am again reducing the number of child dependant rates which will now stand at six. The minimum payment which I introduced last year is being increased to £11 a week and the range of the payments for children will now be between £11 and £15.
The following examples illustrate the effect of the increases which apply from July next: a couple with two children on long term unemployment assistance will receive £105 per week, an increase of £8, while a couple with four children will receive an increase of £10 bringing their payment to £127; a couple with four children on short term unemployment assistance or supplementary welfare allowance will receive £120 per week, which is an increase of £11.10, while a couple with six children will get an increase of £13.10, and a total payment of £142 a week; a lone parent under 66 with three children on an assistance payment will receive an additional £5.20, giving a total payment of £93.50; a widow or deserted wife on a contributory payment with four children will receive a payment of £116 which is an increase of £5.10; an old age pensioner with an adult dependant on a non-contributory pension will receive a total increase of £4.40, giving them a payment of £79.50; and a couple both over 66 years and under 80 on a contributory old age pension will receive a payment of £107.20 which is an increase of £5.00.
I will now go through the different sections. I have made my comments available for the benefit of Senators and I do not want to hold up the House by reading through them and taking up too much time.
Section 5 deals with child benefit. It pinpoints the fact that we are giving a 5 per cent increase, which means we are back to the annual rates of increases for child benefit. Some 470,000 families will benefit in respect of one million children.
Section 6 extends the child dependant payments up to the age of 20 for long-term recipients. This is in line with a commitment I made last year to raise the age over three years. This is the second stage and next year the Government plan to bring the age up to 21.
The PRSI ceiling is covered in sections 7 and 8. The PRSI exemption for low paid workers is covered in section 9, and from 6 April this year this will come into operation. From 6 April 1990 workers who currently pay PRSI contributions at the standard rate and who earn a gross income of £60 or less a week will no longer be liable for their share of the PRSI contribution, 5 per cent, for that week. The exemption can mean an increase of £3.30 a week in take home pay for some workers and exempted workers will continue to have the full entitlement to social insurance benefit and pension. It is very important to note that, because in some countries you are exempt under a certain level and Members have been telling me about places where people are exempt. If they are totally exempt they get no benefit and that is not much value to those people. It is important to realise that it is estimated that this will affect some 50,000 workers and that they will still have their entitlement to all the benefits under the scheme, even though they be exempt from payments. The employer's PRSI exemption scheme is set out in section 10 which provides the mechanism whereby employers who took on extra people will be exempted from their payments for the next year.
Pay-related benefit is covered in section 11 which provides for the increase in the floor in calculating the rate from £69 to £72. The various arrangements for the lone parent's allowance are set out in sections 12 to 16. The amount of the allowance will depend on the number of children.
The carer's allowance is provided for in sections 17 and 18. Provision is made for the coming into operation of the carer's allowance by way of a commencement order and it is intended to have that in place by October. The new appeals office is provided for in sections 19 to 22.
The amalgamation of the occupational injuries fund and the redundancy and employers' insolvency fund with the social insurance fund is set out in sections 23 to 31. This measure will involve no increase in the contribution rate for employers which comprehensively will still stand at 12.2 per cent from 6 April 1990. The amalgamation will allow for easier administration, more efficient accountability and control and more secure financing, and will ensure that social welfare payments in respect of employees will originate from one fund. Sections 23 and 26 provide for the relevant amendments to the legislative references to the occupational injuries fund and the redundancy and employers' insolvency fund.
Section 32, which deals with disability benefit, is an important improvement for insured workers. It relaxes a condition for receipt of disability benefit after one year, which I consider particularly harsh in its application to some persons. Under the present legislation a person who has been in receipt of disability benefit for one year is required to have 260 employment contributions paid and to have at least 39 contributions paid or credited in the governing contribution year for the payment of disability benefit to continue. Claimants in future may continue to receive benefit if they remain incapacitated for work without having to satisfy the requirement of having 39 contributions paid or credited in the governing contribution year. That is an important improvement.
Section 33 provides for another measure which I think will make an appreciable difference to older persons who have to cope with the death of a spouse. It extends the after death payments to spouses in respect of whom an adult dependant allowance would have been payable but for the fact that he or she was receiving an old age non-contributory pension or a blind pension in his or her own right. Under existing provisions, six weeks' payment of benefit is made on the death of a social welfare recipient to the spouse for whom the adult dependant allowance was being paid. Payments are subsequently treated as payment on account of any widow's or widower's pension which becomes payable.
Means test improvements for old age pensions are set out in sections 34 and 35. Many elderly people are living in houses which have been their homes for many years but which are no longer suited to their needs and are no longer in a position to maintain. They may be able to find something more suited to their needs or to have the opportunity to avail of sheltered housing, but they face the dilemma that if they sell their homes they may lose all or part of their pensions because the capital raised on the sale of the house will fall to be assessed as means under the rules for assessing capital. Faced with this situation it is understandable that elderly people may hold on to their homes, perhaps ending up in hospital or in institutionalised care instead of living out their lives in comfortable circumstances. I am providing in section 35 for regulatory powers to exempt the income derived from the sale of a pensioner's principal residence from the assessment of the means in certain circumstances. That is a very important improvement which has not been referred to much in the other House. It is a major improvement for elderly people.
Section 34 provides that payments received by persons living in Gaeltacht areas who accommodate Irish students who wish to improve their fluency in the Irish language will not be assessed as means. This provision will benefit the mná tí of Gaeltacht areas who play such a vital part in fostering an interest among the young in our language.
Arrangements have been in operation for a number of years now which exempt widows and other groups from liability for the employee's share of the PRSI contribution. In line with a Government decision taken last year in the context of expenditure reviews, I am providing in section 36 that those arrangements will be phased out over the next three years. From 6 April next, widows and other persons affected who are employees will pay a PRSI contribution of 3 per cent increasing to 4 per cent in the year commencing 6 April 1991. The full employee's social insurance contribution of 5.5 per cent will be payable in the year commencing 6 April 1992. The health contribution and the employment and training levy will continue to be exempted. However, widows and other persons affected who are on low pay and who benefit under the PRSI exemption scheme I referred to earlier will, of course, continue to be exempt from their share of the PRSI contribution. I am proposing similar arrangements for those in this category who are self employed.
As a consequence of their renewed liability for PRSI contributions, I am also arranging from 6 April next for widows and other groups to be entitled once again to disability benefit at half rate for up to 15 months' duration in addition to their existing pension or allowance entitlement. This is a very important improvement for widows and other related groups, deserted wives, for instance, on deserted wife's benefit. Widows and others on low pay who benefit under the PRSI exemption scheme will also be entitled to the half rate disability benefit for 15 months. They will also, incidentally, be entitled to the half rate unemployment benefit when it comes out so both of those benefits will benefit widows. I am satisfied that the new arrangements for widows and others represent a reasonable approach to this question and that they will be welcomed by widows in employment generally who are willing to pay PRSI again in return for the extra benefits.
Section 37 extends the categories of persons exempted from the social insurance scheme for the self-employed to include those who are receiving occupational pensions on account of their late spouse and whose only other income is unearned income.
Section 38 provides that any moneys paid by way of supplementary welfare allowance, in respect of a period during which the claimant is awaiting payment of a disabled person's maintenance or an infectious disease maintenance allowance, shall be treated as payment on account of the allowance in question. This brings those health board payments into line with existing recoupment arrangements for social welfare payments.
Under the occupational injuries scheme, disablement benefit is paid by way of pension if the assessment of disablement is greater that 19 per cent. Where it is 19 per cent or less a gratuity is normally payable but if the period of assessment is for life or exceeds seven years the claimant may opt for either a gratuity or a pension. In some cases the weekly amount of such pensions can be quite small and, therefore, I am providing in section 39 of the Bill for a gratuity to be paid in respect of all new assessments below 10 per cent.
Sections 40 and 41 provide for amendments to the pre-retirement allowance, the single woman's allowance and the orphan's (non-contributory) pension, to allow that the maximum rates of these payments will be payable to persons with means of up to £2. They began previously with every 10 pence and now it will not begin until £2. It is really a streamlining of that, which has been misinterpreted by some people.
Last week I signed regulations bringing into effect the pre-retirment allowance scheme. The new allowance is designed to cater for those over age 60 who are receiving long-term unemployment payments. My intention in introducing the allowance is to provide these people, many of whom regard themselves as retired, with an alternative method of receiving their income maintenance payments. Those eligible for the allowance will receive their payments by way of a pension book which they can cash at their local post office. They will no longer have to sign on each week at the employment exchange.
The allowance is payable at the same rate as long-term unemployment assistance and those receiving it will retain entitlement to any extra benefits such as fuel allowances. Because of the different payment structure for those with means, under the pension system some persons may gain slightly as a result of the rounding up of their payments.
I am delighted that even at this early stage the indications are that the scheme will be very popular. In the past few weeks over 4,000 unemployed persons have opted for the allowance. Their new books were issued to them in time to be cashed last Thursday.
Section 42 provides for an amendment to the family income supplement scheme to enable minimum amounts of supplement to be prescribed in regulations. The purpose of this is so that I can set a higher minimum rate than is fixed at present. That is an important benefit and an important development. It will fit in with the family income supplement changes which we will be making shortly. This allows us to bring in a minimum above what we could do otherwise. Section 43 provides for a technical amendment to the rates payable under the various social assistance schemes to enable the rounding up of payments.
Section 45 provides that any sum deducted from an employee in respect of social insurance contributions but still unpaid at the time of a winding-up under the Companies Acts will not be regarded as part of the assets of a limited company but instead will be paid to the social insurance fund. This is to protect insured workers. The section also confirms the preferential debt status of unpaid PRSI contributions in certain cases.
Section 46 extends to public sector drivers and vehicles the provision that the amount of disability benefit, pay-related benefit or invalidity pension, payable for up to five years and arising out of a traffic accident, shall be taken into account in assessing damages for personal injuries.
Section 47 is designed to ensure that persons who commence a course under the vocational training opportunities scheme and later find out that it does not work out for them may continue claiming their unemployment payments at the long-term rate without serving waiting days when they resume their claim. This is important for flexibility. The vocational training opportunities scheme afford the long-term unemployed an opportunity to attend education and training courses at their local VEC and, at the same time, receive an allowance equivalent to their unemployment payments.
A person convicted of fraudulently obtaining a social insurance payment is disqualified for receiving benefit for three months. In section 48 I propose to bring the corresponding provision in relation to social assistance payments into line by reducing the disqualification period for these payments from six to three months. This is just bringing it down to the same period.
Section 44 provides for certain amendments to the provisions relating to prosecutions which are necessary to facilitate proposed alternative methods for making unemployment payments. Sections 49 and 50 are technical amendments designed to simplify the First Schedule to the Social Welfare (Consolidation) Act which sets out the rates of social insurance payments. This is in keeping with my policy of simplifying the system so as to make it more easily understood. Section 51 provides that certain regulations will require the consent of the Minister for Finance.
This Bill is an important and in some respects an historic measure of legislation in the social welfare area. It gives effect to the improvements in our social welfare schemes and services announced in the budget and also introduces two new schemes. We are continuing the progress made in the past three years in improving and modernising the social welfare system. In that short period we have introduced some of the most far-reaching improvements ever seen.
We are conscious that social welfare recipients are among the most vulnerable sections of society and that legislative change can have a major impact on them.
Our primary objective at all times is to safeguard and improve the position of those dependent on the State's support systems. I am confident that we are achieving that objective and that the end result will be a social welfare system that will cater in a fair, efficient and, above all, sensitive and caring way for those who benefit from and those who rely on the social welfare services.
I commend this Bill to the House.