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Social Welfare Code

Dáil Éireann Debate, Thursday - 16 February 2017

Thursday, 16 February 2017

Ceisteanna (164)

Clare Daly

Ceist:

164. Deputy Clare Daly asked the Minister for Social Protection his plans to reverse the 2012 change to widow's, widower's and surviving civil partner's contributory pension in order that persons in receipt of this payment may also receive illness benefit. [7919/17]

Amharc ar fhreagra

Freagraí scríofa

The social welfare system is primarily a contingency-based system, with entitlement based on a number of defined contingencies such as sickness, unemployment, old age or widowhood.

There are two basic principles which underpin the Irish social insurance system. Firstly there is the contributory principle. Under this principle there is a direct link between the PRSI contributions that a person has paid and entitlement to a varying range of benefits and pensions. Where a person has sufficient PRSI contributions, then benefits and pensions may be paid as of right, where a particular contingency arises and without a means test.

Secondly there is the solidarity principle. Under this principle the benefits and pensions that are paid are not directly related to the amount of PRSI contributions paid by insured persons. PRSI contribution income is instead redistributed to support contributors who are more vulnerable. In this regard, it should be noted that some PRSI contributors do not experience all of the contingencies during their life, or may not be in a position to benefit from one or more such payment. For example, one contributor may never require access to Invalidity Pension whereas it may be a crucial support for another. Similarly, there will be many contributors who will never require coverage for Maternity Benefit, but who nevertheless continue to be levied PRSI at the full rate during their working years.

In addition, there is a general principle of one person, one payment. Given the contingency-based nature of this system, it can happen that a person may experience more than one contingency at the same time. For example, an unemployed person may become sick. The general approach is that if a person experiences more than one of these contingencies at the same time, he or she can receive only one of those payments. This principle is common to social security systems across the world.

There were a limited number of exceptions in the social insurance system to the general principle of one person, one payment. These exceptions usually applied in the context of short-term benefits. For instance, recipients of One-Parent Family Payment, Widows and Widowers Pensioners etc. could, until recent years, also receive short-term social insurance benefits, such as Illness Benefit and Jobseeker's Benefit at half-rate at the same time. These overlapping payment arrangements were introduced in the early 1950s when the social insurance system was first established, at a time when there were only 10 individual social welfare payments and when rates were significantly lower in real terms than they are now. The social welfare system has been significantly developed over the intervening period, with the result that the number of possible combinations of concurrent contingencies has increased greatly.

In the context of the difficult fiscal environment in recent years and the Government's commitment to maintain existing core rates of primary payments for social welfare recipients, the concurrent payment of half-rate Illness Benefit and Jobseeker's Benefit in addition to One-Parent Family Payment, Widows and Widowers Pensions etc. was discontinued from January 2012.

It is realistic and prudent to maintain the underlying principle of entitlement to only one payment at any one time, i.e. one person, one payment. To do otherwise could potentially involve very significant and unsustainable additional expenditure in the long term.

Finally, it should be noted that the last Actuarial Review of the Social Insurance Fund published in 2012 found that Fund has a strong redistributive nature. This is demonstrated by the fact that those on lower incomes fare considerably better than those on higher incomes and the Fund provides better value to female rather than male contributors.

I hope this clarifies the matter for the Deputy.

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