I am delighted to be back in the Seanad. Last month the Government announced a responsible, balanced and pro-employment budget. The social welfare package included in the budget was carefully designed to ensure a number of core groups would benefit. They include pensioners; families with children, including lone parents; carers, and people with disabilities. The budget was prepared in the context of the country moving in the right direction, with living standards gradually being raised in every home.
My Department has carried out a social impact assessment of the main tax and social welfare measures included in budget 2016. This assessment was based on the tax and welfare micro-simulation model, SWITCH, which had been developed by the ESRI. Social impact assessment is an evidence-based methodology which is used to estimate the likely effects of policies on household incomes, families, poverty and incentives to take up employment. The assessment found that average household incomes would increase by 1.6% or €14.30 per week as a result of budget 2016. Importantly, there are higher than average gains for the bottom two quintiles, the lowest income households in society, while the smallest gain is for those in the top quintile.
The biggest beneficiaries are lone parents, dual and non-earning couples with children, with an average gain of 2%. Non-earning lone parents and single earning couples with children fare above average, gaining around 1.8%. I should emphasise that child benefit expenditure, although universal, favours lower income households. Budget 2016, therefore, will deliver considerably bigger gains for the poorest households.
I refer to the State pension and the Christmas bonus. Throughout the worst of the crisis, the Government protected the State pension. I am particularly pleased that the Bill provides for an increase of €3 a week for pensioners and carers aged 66 years and over. It is small, but it is important to indicate that circumstances are getting better. There is also an increase of €2 a week for adult dependants aged under 66 years and an increase of €2.70 for adult dependants aged 66 or over. This will benefit 583,000 pensioners and more than 93,000 qualified adults and is the first weekly rate increase for pensioners since 2009. That is important because they have been without an improvement in weekly income for quite a long time. There has been a significant welcome from pensioners for the fact that we are able to increase payment rates. This is all part of our approach of properly assisting the different groups in society, most particularly those who are less well off and vulnerable. Pensioners asked us to maintain the free travel scheme and we have done so. The budget added €3 million in additional funding to the scheme, making a total of €80 million in 2016. Pensioners value their free travel.
On Monday the Ministers for Social Protection and Public Expenditure and Reform signed the regulations for the payment of a 75% Christmas bonus which will benefit older people, carers, people with disabilities, long-term jobseekers and lone parents at a financially stressful time of the year. We hope the first payments will be made in the first week of December. This will mean a bonus payment of €141 for a single person on disability allowance, while a pensioner couple, both of whom are in receipt of the non-contributory State pension, will receive a bonus payment of €328.50. Some 1.23 million people will receive the Christmas bonus in the first week of December and we make absolutely no apologies for paying it. Our focus is on ensuring we can improve circumstances for every person, not just a few. Importantly, the bonus is spent in the local economy in businesses and stores, providing a stimulus for communities across the country.
When the Government took office, there were grave fears that the numbers unemployed would exceed 500,000. The deficit in the Social Insurance Fund was heading towards €2 billion and unemployment would eventually peak at 15.1%. It is currently 8.9%. Therefore, we now have an unemployment rate under 9% for the first time since December 2008. Employment increased by 56,000 in the past 12 months, which means that more than 1,000 people are returning to work every week. There has been an increase of 59,400 in full-time employment in the past year, with a corresponding fall of 3,400 in part-time work. This means that more than 1,100 people are returning to full-time employment every week. It is welcome that people are securing full-time employment rather than being under-employed or in part-time work. This is making a significant difference not only to the people concerned but also to their families. There are still, however, too many people unemployed, but it is clear that unemployment is falling rapidly, thanks to the sustained focus of the Government on restoring the economy to growth and helping people back to work. The Government has ensured there has been a focus on a jobs-led recovery.
As a result of people returning to work in high volumes and more employers being able to reward employees with pay increases, the Social Insurance Fund has been transformed. The 2016 budget estimate provides for Social Insurance Fund income to increase to almost €8.9 billion in 2016, with expenditure estimated at €8.67 billion. This means that there will be a projected surplus of €216 million in the fund, the first such surplus since 2007. If we can continue to increase the surplus, those who have contributed to their pensions can be confident that they will receive their pensions and that we will be able to improve them as time passes. The certainty that pension levels will be maintained with the possibility of increases is significantly important, especially to older people.
The increase in the minimum wage to €9.15 an hour from next January is a hugely important measure for low paid workers. We made a pledge earlier this year that if we increased the minimum wage, we would address PRSI "step-effects" arising from such an increase and we are doing so in the Bill. The measures will reduce the weekly PRSI bill for more than 88,000 employees and ensure the benefit of a national minimum wage increase will be felt by all those in receipt of it. This is, of course, in addition to the gains from the USC changes announced on budget day. This is the second time the national minimum wage has been increased under the Government and while there is a still a distance to go, the increases have been welcomed.
The legislation provides for a €5 increase in the rate of child benefit, making it the second budget in a row in which child benefit has been increased. This will bring the monthly rate from €135 to €140 per child, with effect from 1 January 2016. Child benefit is a crucial support for families, in particular, low and middle income families, through difficult times. A total of 623,000 families and almost 1.2 million children will benefit from the increase.
The introduction of a paternity benefit scheme to take effect from next September was also announced in the budget. The family income supplement income threshold is also being increased by €5 a week for each of the first two children from next January. This will mean an additional €3 or €6 a week for in excess of 59,000 low income working families with a total of more than 131,000 children.
The Minister will shortly make regulations to provide for an increase in the earnings disregard for jobseeker's transition payment, from €60 to €90 per week. The improved disregard will apply to existing and new recipients from next January. All earnings above €90 will be assessed at a rate of 50% from January; they are currently assessed at a rate of 60%.
Funding for the school meals programme will increase by €3 million next year to €42 million. The programme currently benefits 217,000 children in more than 1,700 schools and other organisations. The allocation of an additional €3 million in 2016 will be used to provide breakfast for an additional 27,800 pupils or lunch or a light meal for almost 12,000 additional pupils.
As is very clear from the figures I gave, the strong economic recovery we can see around us is, above all, jobs-led. That is crucial because secure and fairly paid work remains the best protection against poverty. The budget is, therefore, pro-work. Our aim is to move towards a full employment society, with work for everyone who needs and wants a job. In the budget increases of €2.50 a week were also announced in the top-up payments for jobseekers availing of the community employment scheme, the rural social scheme, Gateway, job initiatives and other such schemes. Earlier this year we introduced a new incentive called the back-to-work family dividend which helps jobseekers with families to return to work. This dividend provides an incentive of €1,550 per child in the first year of employment or self-employment and half that amount in the second year.
There are currently over 9,500 families and 15,000 children benefiting from the dividend. This measure, when taken together with the employer incentives such as JobsPlus, will ensure that long-term jobseekers also benefit from the strong recovery in the labour market.
Apart from the rate increases I have already mentioned, the fuel allowance is being increased by €2.50 per week to €22.50 for the duration of the fuel season. This is another targeted measure and will benefit almost 381,000 households. The name of the respite care grant scheme is being changed to the carer's support grant. In light of the hugely important role carers play in our society, I am particularly pleased to announce that the rate of the grant is to be increased by €325 to €1,700 from 1 June 2016. It will be payable to around 86,000 carers next year. In another improvement, carer's allowance will now be paid for 12 weeks after the death of the person being cared for, instead of the current duration of six weeks. I thank the carers' organisations which made that proposal during the course of our pre-budget discussions.
I will now turn to the specific measures in the Bill. Section 1 provides for the Short Title, its construction and collective citation with the Social Welfare Acts and the Pensions Acts. Section 2 provides for the definition of certain common terms used in Part 2. Section 3 provides for an increase in the rate of State pension, contributory, and, in respect of persons who are 66 years or older, increases in the rates of the following schemes: widow's, widower's and surviving civil partner's contributory pension, death benefit and disablement pension. It also provides for increases in rates for qualified adults.
Section 4 and Schedule 1 provide for an increase in the personal and qualified adult rates of State pension, non-contributory. It also provides for an increase in the rate of carer's allowance for recipients who are 66 years or older. Section 5 and Schedule 2 provide for the renaming of the respite care grant to carer's support grant. Many have welcomed this because it recognises what that grant does. Section 6 provides for an increase of €325 to the carer's support grant, from €1,375 to €1,700. Section 7 provides for an increase in the monthly rate of child benefit, from €135 to €140. Section 8 provides for an increase of €5 per week in the family income supplement, FIS, earnings threshold for families with one child and €10 per week in the thresholds for families with two or more children. This measure comes into operation on 7 January 2016. Section 9 provides for the period in which carer's allowance is payable following the death of the person being cared for, to be extended to a period of 12 weeks. Section 10 provides for two changes in pay-related social insurance, PRSI. A new tapered PRSI credit is being introduced for employees insured at class A whose earnings are between €352.01 and €424 per week. The upper threshold at which the lower 7.8% class A rate of employer PRSI applies is being increased from €356 to €376 per week. These measures take effect from 1 January 2016.
As we are all aware, earlier this year we saw the historic result of the marriage equality referendum. The subsequent legislation, the Marriage Act 2015, was enacted on 29 October. Sections 11 to 18, inclusive, provide for amendments to the Social Welfare Consolidation Act 2005 in light of the enactment of that Act. Section 19 provides for the inclusion of registered nurses within the definition of medical assessor in the Social Welfare Consolidation Act. These nurses will be employees of the Department. Section 20 provides for the inclusion of credit unions providing personal micro credit loans among the specified bodies for the purposes of the household budgeting scheme. Sections 21 to 25, inclusive, provide for amendments of the Pensions Act 1990 to enable the Financial Services Ombudsman to carry out the role, duties and functions of the Pensions Ombudsman in light of the intended merging of those two offices.
The significant social welfare package in this year's budget consists of diverse and complementary elements. These include the Christmas bonus as well as improvements in a range of payments, benefiting in particular pensioners and retired people, people on disability allowance, carers, families with children and families at work, who have children and are on low incomes. These positive developments have been made possible by all the taxpayers, workers and employers in the country who pay PRSI.
The fact that so many more businesses and individual workers are getting back to work has been the catalyst that has enabled us to provide for the improvements and changes we have made in the budget and this Bill. We are always very conscious of our responsibility to ensure that every cent of employee and employer PRSI contributions is used effectively and efficiently. We are focused on making sure that all social protection monies go to those for whom they are intended, that they get the payments they are entitled to and that the special investigations unit, inspectors and departmental staff will do their best to ensure that nobody can defraud the social welfare system or take money that rightly should go to persons who require it most.
Over the recent very difficult and challenging years, our social welfare system has continued to play an essential role safeguarding the most vulnerable in our society. We protected that very strong system through the worst of times. We are now strengthening and improving it in these better times. The social protection measures contained in budget 2016 and in this Bill are built on the foundations of the recovery. These measures are targeted at securing improvements in living standards and creating greater opportunities for every person, every family and every community. I commend the Bill to the House.