This is a very important Bill which fulfils the commitment in the new Programme for a Partnership Government to protect and improve the position of those dependent on social welfare. This is the first major legislation to come before the Seanad to honour that commitment.
In this year's Bill we are more than maintaining the real value of social welfare payments. Interest rates are falling. The latest consumer price index is lower than expected and indicates that the rate of inflation will be below, if not well below, the 3.5 per cent increase in weekly payments we are providing. We are substantially improving payments for children. Child benefit is being increased to £20 a month for the first three children. This will benefit all families, whether on social welfare or in employment or self-employment. Extra support is going to families at work through improvements in the family income supplement. We are improving benefits by bringing in better maternity provision, including entitlement to maternity benefit for volunteer development workers when they return to this country; easier access to invalidity pension for people who are very ill; a free colour TV licence for certain pensioners which I am introducing from April; and the Government is restoring confidence in the social insurance fund for workers and employers.
Overall, we are providing an additional £180 million a year for social welfare. That extra money brings the overall expenditure this year to £3.7 billion, i.e., over £10 million a day for each day of the year. That huge daily expenditure touches the lives of almost every person or ever family in the country. We provide a weekly payment to almost 1.5 million people, 800,000 recipients and their 700,000 dependants, while child benefit reaches 480,000 families each month.
In the course of its passage through Dáil Éireann, three issues in particular in this Bill have given rise to much comment. At times this comment has been, to say the least, uninformed, if not downright misleading, in relation to what I am trying to achieve by way of equity and access for the hundreds of thousands of people who depend on the social welfare system. I would like to set the record straight on these matters before Senators begin their detailed examination of this Bill.
Section 14 of the Bill provides that students in full-time education will no longer be eligible to claim unemployment assistance or supplementary welfare allowance for their summer holidays, other than in circumstances which will be prescribed in regulations. This measure will not apply to mature students or those in "second chance" education schemes. Each year about 12,000 full-time students sign on for the dole during their summer holidays. This summer dole costs in the region of £8 million. In addition to receiving unemployment payments, many students also claim rent supplements while living away from home during the holiday period.
If every single one of our full-time third level students were to get the maximum unemployment assistance during the summer holidays, the cost would rise to at least £60 million a year. It would rise again to about £90 million if all of them also qualified for rent allowances by moving out of the family home and into a flat. Expenditure on unemployment assistance is funded in total by the taxpayer. It is the taxpayer's contribution to support unemployed people and their families who are in the market for a full-time job. The same taxpayer invests in excess of £10,000 in every third level student over the duration of his or her course. People engaged in full-time education cannot be regarded as being available for full-time employment during their summer holidays. Their commitment to their studies rules that out. They are only free to take up short term work for the holidays and, on that basis, they would not be entitled to receive unemployment payments. This new arrangement will bring our rules for full-time students into line with what happens in Northern Ireland, Britain and other EC countries.
This new arrangement could have an impact on students who have come to depend on the dole for financial support during the summers months, if they cannot get work. In particular, I am anxious to ensure that those from less well off families receive every encouragement and support of a practical nature. Despite considerable progress in recent years in opening up access to third level education across all sectors of Irish society — 350 unemployed people are now attending third level courses under a scheme I introduced three years ago — the facts are that participation in higher education is heavily weighted towards young people who come from higher and middle income households. Fewer than 10 per cent of our students come from families with lower incomes. Senators may have seen a recent study which shows that this percentage has again dropped.
This summer I am introducing a scheme of summer work for students which will give them a weekly payment instead of what they get on the dole. This new scheme will allow students to do community work, voluntary work or work provided by public sector bodies and receive a "wage" approximating to their unemployment payments. There are a few specific points which I would like Senators to note.
Every student who is eligible to receive an unemployment assistance payment will be eligible to participate in the scheme. In the case of students whose families are dependent on a social welfare payment, they would get either summer work under the scheme or the equivalent of their unemployment assistance provided they apply from their home address. The scheme will operate for a fixed period over the summer holidays with the students working a certain number of hours or days in return for the payment he or she receives.
Contrary to what student representatives are suggesting, there are many thousands of students who would be willing to put something back into the community through their talents and expertise. For many, particularly those who do not have opportunities otherwise, the scheme will provide practical and invaluable experience using their life skills. Equally, there are many voluntary organisations working in the community who would welcome the opportunity to avail of third level students for a number of weeks during the summer holiday period. Local authorities, health boards and other public sector bodies could avail of that expertise for work which needs to be done in their respective areas. Some voluntary organisations have already welcomed the initiative and the potential it has for enriching their communities by utilising the skills of people who are the cream of our education system. My Department is working on the details of the proposed new scheme and I will be consulting with organisations such as those in the voluntary sector, regional interests, the new partnership groups as well as local and public authorities. As I have said, I intend to bring this innovative scheme into operation this summer.
Section 14 of the Bill also provides that young people leaving second level will not be eligible for unemployment assistance or supplementary welfare allowance for a period of three months after completing their second level education. I have made arrangements to ensure that these young people can register for FÁS immediately and that their eligibility for courses will be continued. Parents on social welfare payments will continue to receive the child dependant allowance in respect of children aged 18 or over for the three months in question. Up to this, it was only families on long term payments who were entitled to child dependant allowances in respect of children over 18 in full-time education. This allowance will now be paid to those families in receipt of short term payments also.
Section 23 deals with the allocation of personal social services numbers. It provides that the personal social services number will be the relevant number for all social welfare purposes — registration, claiming benefit, paying PRSI contributions. The sole purpose of this provision is to give legal status to the allocation of these personal social services numbers to customers by my Department. The first point I would like to make is that my Department is not introducing a State identity card. It is not the intention that the social services card will be used as a means of identification. There will be no photograph on it. It will not be compulsory to carry it. It is solely intended to facilitate easier access to social services generally. If a person wants to use it for other purposes, that is their perogative.
Initially, it will serve as a registration card and will be used to facilitate speedy confirmation of a person's social welfare record in situations where a person visits a social welfare office, a community welfare officer, tax office or a post office which has modernised payment services in connection with payment of a social welfare benefit. The Department of Social Welfare will pay increasing amounts of payments through post offices using these cards. The card will contain the person's name and RSI number, his or her date of birth and sex, but only the name and RSI number will be visible on the card.
I stress to Senators, the card has no legal status outside of its use for social welfare and tax purposes. There are some hundreds of thousands of plastic cards in circulation in this country. We all accept that these cards bring us the benefits of new technology in dealing with our financial affairs. The lowest penetration of any particular group in this area of usage of new technology has to be those people who receive their payments from the State. Our customers whose need for efficiency and promptness in receiving their payments is just as great as those who are in a position to pay for the privilege of using plastic cards should have access to all the benefits new technology can offer in their dealings with the Department of Social Welfare.
The third point I want the House to note is that I have already reversed the controversial measures introduced last year. I made regulations last week which revoked a number of those measures and adjusted others to substantially improve the position of people adversely affected by them. I have a number of regulations in hand which I will bring into force as soon as this Bill is passed into law. I would like to make it clear that I have power to bring in some of those regulations by virtue of previous legislation. I was able to bring them in before this Bill and I did so last week. They are now available in the Library and if anybody doubts that they may go there and check them. I had difficulty in convincing some Deputies in the other House that these regulations had been made. Once they are made and signed they are laid in the Library and are there to be seen. There are further regulations necessary which require the legislation which is now being passed. They cannot be made until this legislation is passed; when that happens they will be made and brought into operation. I make that clear because some people in the other House, and on radio since, have been trying to suggest that the regulations have not been made yet. They have been made: I suggest that all doubting Thomases go to the Library where they can be shown copies of them. The regulations that will follow the passing of this legislation may also be checked.
The new regulations revoke the condition for disability benefit requiring at least 13 paid PRSI contributions in a recent contribution year for people on long term unemployment assistance and for those on pre-retirement allowance; they also revoke the condition for dental and optical benefits requiring at least 13 paid PRSI contributions in a recent contribution year for people on long term unemployment assistance and pre-retirement allowance. These measures will immediately benefit those of the 140,000 long term unemployed and 15,000 PRETA recipients who lost out as a result of the change last year and may, potentially, benefit all of the people in these two categories.
The new regulations also restore dental and optical benefits to any worker earning up to £30,000 per annum and £60,000 per annum for his or her dependent spouse. They restore dental and optical benefits to pensioners affected by the change in the contribution conditions requiring five years paid contributions; and they relax the condition for entitlement to unemployment benefit for part-time workers by reducing from two days to one day the loss of employment which a part-time worker must incur.
The regulations awaiting the passing of this Bill will increase substantially the amount of daily earnings which will be disregarded in assessing earnings from casual insurable employment for the purposes of entitlement to unemployment assistance. The current level of disregard amounts to the daily rate of unemployment assistance for each day worked plus an additional amount of £10. I propose to increase the total disregard to the daily rate of unemployment assistance plus an extra £15 for each day worked. This significant increase makes casual employment a real option for unemployed persons. For example, a married man with two children will now be allowed to earn up to £34.42 for each day which he works without affecting his rate of unemployment assistance for the days he does not work.
I have immediate plans to improve the situation for people who have recourse to the supplementary welfare allowance scheme for dealing with payments to meet exceptional needs. I want to approach this problem along the following lines. I am providing an additional £12.5 million this year to meet additional demands on the scheme; I want to ensure that the discretion which health boards have is exercised in a sensible way to ensure that people in genuine need are helped sympathetically and effectively; and I am drawing up a code of practice to deal with debts which involve providers such as the ESB and An Bord Gáis. I am consulting with the ESB, An Bord Gáis and the health boards in relation to the code of practice which, when developed, will replace the guidance originally offered by the circulars issued last year and the circulars will be withdrawn. I will also be publishing revised guidelines covering all aspects of the scheme following the review which is taking place at present.
It is important that we have a consistent approach in the way supplementary welfare is administered and the measures I am taking will achieve this objective.
This is a good Bill for people on social welfare. The main improvements being provided for are: an increase of 3.5 per cent from next July in the weekly rates of social insurance and social assistance payments; a special increase of 4.9 per cent from next July in all short term rates of payment to bring them nearer to the priority rate — 83 per cent of all people receiving social welfare assistance will now get more than the priority rates recommended by the Commission on Social Welfare and I look forward to closing that gap totally by next year; a substantial increase of 26.6 per cent from next September in child benefit to £20 for each of the first three children — the rate for the fourth and subsequent children is being rounded up to £23; a new grant of £200 for mothers on the birth of twins; increases in the income limits for family income supplement from next July — all families in receipt of FIS will be £12 a week better off; a special increase of 11.7 per cent in the carer's allowance to give a new rate of £59.20 a week which is in line with long term payments; increases in the minimum and maximum rates of maternity benefit; a special increase of 20.6 per cent in the orphan's non-contributory pension which will now be the same as the orphan's contributory allowance of £39 a week; and the alignment and consolidation of parts of social welfare legislation to facilitate the introduction later this year of a social welfare consolidation Bill.
Unemployment is the greatest challenge facing this Government. In real terms, that means creating enough jobs. To achieve that we need a realistic and pro-active approach. We need to expand our traditional role in social welfare which is to ensure that those who, through illness, unemployment or old age, are unable to provide for themselves are looked after financially.
I believe there are two key requirements for those who are seeking either their first job or a subsequent one. They are education and experience, preferably both. If we want to help job seekers who are unemployed, we need to provide more training, education and work experience for them. This applies in a special way to young people who are not receiving the State financial supports which go to those in third level education. It is right that we as a country invest heavily in third level education, but we should also invest in young people between 18 and 21 years of age who do not get this opportunity. They especially need training, skills, work experience and often second chance education.
It is essential that we encourage the younger unemployed people to avail of further education and training as soon as possible after leaving formal education. They must be diverted down that route rather than on to the unemployment cycle and dependency on social welfare.
Through initiatives which I introduced we now have a range of educational opportunities schemes which give unemployed people a second chance to complete or extend their education. They can even go further and take on third level courses. Over 2,000 unemployed people are currently taking second level courses and a further 350 are in full-time third level study. Young lone parents also need access to this type of second chance education. I intend to encourage lone parents to take up these opportunities which do not affect their weekly payments.
I have also provided opportunities for part-time work which include payment of a weekly allowance from my Department and opportunities to do voluntary work without interfering with the flow of unemployment payments.
In my view it is far better that unemployed people get work experience or training than be excluded from the work-place and left on the dole. I proposed to the Government in 1991 that it pay unemployment payments and extra benefits for a period of six to 12 months and allow people to work as employees, to be self-employed or to receive training. This proposal in relation to the self-employed was put into action in the 12Programme for Economic and Social Progress unemployment black spots. We now pay extra benefits to 2,200 people who are at work through these schemes and 240 self-employed people are receiving a payment while working. There are now 7,500 people at work in the work experience scheme — the employment subsidy scheme — and 610 in training — the job training scheme. These initiatives are the success stories of the past few years. I intend to build on that success and expand them further. In addition, I will pay particular attention to the needs of people with disabilities and groups such as lone parents.
The new PRSI exemption scheme, which is part of our job creation drive, applies to March 1993. The exemption means that employers will not have to pay their element of the PRSI contribution for each additional employee for the tax years commencing April 1993 and April 1994. Employers will also be exempt from payment of the employment and training levy and the health contribution where the new employee holds a medical card. To date, applications have been received from approximately 1,100 unemployed people. This Bill makes legislative provision for the scheme and extends the date for applications to 19 September 1993. This will give us an opportunity to assess the situation. At the average industrial wage of £260 per week, the PRSI exemption amounts to a direct subsidy to employers of £31 per week or £1,647 per annum for each new employee taken on. This is a very valuable incentive for employers and I would urge as many employers as possible to avail of it before the closing date next September.
I am considering at present a new programme of measures to support people in making the transition back into the workforce, either as employees or working for themselves. It will also embrace training opportunities, work experience and further second chance education. This programme of measures will build on the success of the area based companies set up under the Programme for Economic and Social Progress, working closely with the new county enterprise partnership boards. The new initiatives will be directed to long term unemployed people and will offer a range of supports to get them back into the workforce in a manner and at a pace that suits their circumstances. They will also provide those working in the black economy with an opportunity to put their affairs on a proper footing. I plan to bring my proposals to Government shortly.
I will now briefly outline the other main provisions of the Bill. Sections 3 to 8 provide for increases in the rates of payment across the complete range of social welfare schemes. The weekly rates for all recipients will increase from July next. In addition to the general increase, I am further improving certain schemes. Section 4 provides for an increase in the weekly carer's allowance from £53 to £59.20, bringing it into line with other long term assistance payments. In section 10 I am providing for the extension of "after death payments" to enable a spouse in receipt of a carer's allowance to continue to receive both the personal rate and the adult dependant allowance portion for six weeks after death. I am examining the question of awarding credited contributions which will maintain the value of the PRSI record during the period of care to safeguard the PRSI record for carers.
Section 5 provides for an increase in child benefit from 1 September 1993. The new rates will be £20 per month for each of the first three children and £23 for each additional child. This section also provides for a new grant of £200 payable on the birth of twins, with effect from 1 July next. Section 6 provides for an increase in the amount of weekly earnings which can be disregarded when calculating entitlement to pay related benefit.
Section 7 improves the position of those on family income supplements by increasing the weekly income limits across the board by £20. All families on family income supplement will be up to £12 per week better off.
Section 8 provides for increases in the minimum and maximum amounts of maternity allowance payable. From July next, the minimum and maximum rates will be £65 and £159, respectively. This section also provides for the extension of maternity allowance cover to some persons who do not currently satisfy the statutory conditions. Volunteer development workers will now be immediately eligible to claim materntiy allowance on returning home to Ireland.
At present, a person cannot normally qualify for invalidity pension unless he or she has been incapable of work for a least one year. Section 9 of the Bill will provide regulatory powers to allow invalidity pension within that period where this is warranted by the nature and extent of the incapacity involved. This is a measure with which Senators are familiar. Present legislation does not allow a person with an incurable illness to claim invalidity pension until after one year, even though that person may not live longer than three or six months. This legislation allows cases of this type to be dealt with.
Section 11 deals with the definition of an adult dependant in the case of cohabiting couples. At present, an adult dependant's allowance is only payable where the person has care of children. The provision in the Bill will bring the situation of cohabiting couples into line with that of married couples for all social welfare payments.
Section 12 is a technical adjustment dealing with entitlement to disability benefit where there was a previous claim. At present, an incoming claim may be "linked" back with other claims within the previous three years for the purposes of determining entitlement to benefit. Section 12 limits the maximum period of linkage to 52 weeks. This means that the administrative staff do not have to check over previous years to see if there was a lack of linkage which resulted in the claim being disallowed. In that sense, it is a benefit to the claimant.
Section 15 extends the legal provisions regarding limitations on the total amounts payable to couples to include persons on pre-retirement allowance. This brings PRETA recipients into line with those on other types of social welfare payments. In addition to extending the amount of earned income which can be disregarded for unemployment assistance purposes, to which I referred earlier, this section also provides that long term payments received by a spouse or partner will no longer be assessed as means. This arrangement currently applies to short term payments only.
Sections 16 and 17 provide for an increase in the earnings ceiling for PRSI contributions. The ceiling for both employers and employees will be increased by £1,000, bringing the annual amount reckonable for PRSI contributions to £21,300 for employers and £20,000 for employees. These are the normal increases which take place each year and they ensure that the social insurance fund is reasonably healthy.
Section 18 provides that employers taking on new employees from the live register will be exempt from paying PRSI in certain circumstances. Section 19 provides regulatory powers to assign responsibility for the collection of PRSI contributions to persons other than the Revenue Commissioners. This provision empowers the making of regulations subject to the approval of the Minister for Finance, to assign part of that responsibility to other persons.
Section 20 provides that, subject to exceptions in certain circumstances as maybe determined by the Minister, old age contributory pension and widows contributory pension will not be payable to self-employed contributors unless all relevant PRSI contributions have been paid. Section 21 exempts recipients of pre-retirement allowance, who are also self-employed, from their PRSI contribution liability.
Section 22 provides that any person found to be fraudulently claiming a social welfare payment may be disqualified from receipt of any other social welfare payment for a period of nine weeks. This does not, of course, include child benefit. Any person disqualified in this manner will not be entitled to personally claim supplementary welfare allowance during her period of disqualification, but supplementary welfare allowances may be claimed in respect of any adult or child dependants.
Section 23 deals with the allocation of personal social services numbers which claimants may be required to furnish for the purposes of claiming social welfare payments. This number, formerly called the Revenue and social insurance number (RSI number) will become the relevant number for all social welfare purposes in the future.
Section 24 removes an ambiguity relating to the assessment of non-cash benefits as means in the case of the lone parent's allowance scheme. Section 25 removes any reference to the sex of a person when determining whether the person is able to obtain suitable employment. Section 26 provides that unemployed people participating in certain training courses will be insurable at PRSI Class J. This will cover a range of courses such as Euro-form, Horizon, and the NOW programmes as well as mainline FÁS training schemes.
I have taken the opportunity in this Bill to prepare the way for a new Social Welfare (Consolidation) Bill later this year. Sections 27 to 41 seek to align and consolidate various provisions in the social welfare code, relating to the following: claims and payment arrangements; social welfare inspectors; offence and penalties for offences; overpayments and supension of payments; notification of increases in means; and consequential repeal of some existing provisions.
Social welfare legislation was last consolidated more than a decade ago when I introduced the Social Welfare (Consolidation) Act, 1981. That was, in fact, also the first consolidation since 1952, when the unified insurance system was first introduced.
A further consolidation at this stage will simplify the administration of the overall system. It will also enable me to provide a comprehensive but simple layman's guide to the social services which will ensure that those who need to avail of the services will have all the necessary information, guidance and advice readily available to them.
Sections 42 to 52 provide for a number of amendments to the Pensions Act, 1990, which provides protection for the members of occupational pension schemes. This was a first major step and it is now necessary to further enhance the level of protection by updating items such as new definitions, regulatory powers needed to deal with problems that arise in the calculation of preserved benefits and in relation to the winding up of pension schemes. As Senators will know the Pensions Board was established as a follow up process to the 1991 Act. In the meantime they have been implementing the various regulations the Minister has signed in a phased way over the years. Some of the amendments and adjustments which the Pensions Board regarded as necessary are included in these sections and are largely of a technical nature.
As I said at the outset, this is another substantial piece of social welfare legislation. The increases provided for in weekly payments will more than maintain and safeguard the position of those who depend on social welfare. In addition, the Bill provides for a number of other improvements. I hope to bring forward a new Social Welfare (Consolidation) Bill before the summer recess which will promote greater access to and understanding of our legislation.
A very constructive debate took place on the Bill in the Dáil and I look forward to a similar response from Senators today. We will, of course, have the opportunity to tease out and discuss all aspects and sections in great detail on Committee Stage. I commend the Bill to the House.