Social Welfare (Pay-Related Benefit) Bill, 1972: Second Stage.

Tuesday, 19 December 1972

Seanad Eireann Debate
Vol. 73 No. 16

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Question proposed: “That the Bill be now read a Second Time.”

Minister for Social Welfare (Mr. J. Brennan): Information on Joseph Brennan  Zoom on Joseph Brennan  This measure is designed to make better provision against the loss of income suffered by insured workers and their families during periods of sickness or unemployment than is provided by the existing flat-rate benefits under the social insurance system. Down the years these benefits have been regularly improved in many ways but their main defect is that they are not flexible enough to provide adequately for the different needs of persons who, when working, had not the same levels of earnings and, as a result, had widely differing financial commitments related to their levels of earnings. In many cases, particularly at higher pay levels, the rates of benefit are not high enough to enable insured persons to maintain anything approaching their [1330] accustomed standard of living during longer periods of sickness or unemployment.

To raise the flat-rate benefits to a level adequate for the higher paid workers would, however, involve increasing the flat-rate contribution rates to a level that would impose a heavy burden on the lower paid worker. The answer in the scheme proposed in this Bill is to relate both the benefit and contributions to earnings to some degree. There is nothing very novel in the idea of pay-related benefit which exists in one form or another in many countries including Britain. It has been my intention for some time to introduce such a scheme here but it has only now become a practical proposition.

The basic requirements for a scheme of pay-related benefit are to be able to collect contributions based on pay and to have accurate, reliable, and readily accessible information as to annual income on which to calculate the benefit. In the PAYE and associated methods of collecting income tax from employees the machinery now exists by which these requirements can be met for the majority of persons employed in this country, but unfortunately it does not include some classes of employees to which I will refer later.

If that machinery were not to be made available for the purposes of this pay-related social insurance scheme, then a separate system of collection and of record keeping would have had to be set up by my Department for these purposes but to do so would have been an unnecessary duplication of work in the public service and would have placed an intolerable burden on employers by requiring them to furnish the same information twice. The Revenue Commissioners themselves have only recently reached the position where they could agree to undertake the collecting of pay-related contributions and, at the same time, furnish the information needed to pay benefit, and it has thus only now become possible to introduce the pay-related benefit scheme provided for in this Bill.

The scheme of pay-related benefit in this Bill is designed to provide a new [1331] benefit, under the social insurance system, which will supplement the unemployment benefit payable where a person is unemployed and the disability benefit and maternity allowance payable where a person is incapable of work. A person who is entitled to disability benefit may, because his incapacity is due to an accident at work or a specified occupational disease, be in receipt of injury benefit under the occupational injuries scheme in lieu of disability benefit and it is intended that pay-related benefit will be payable to him so long as he has an underlying entitlement to disability benefit.

The existing flat-rate benefits mentioned, including amounts for adult and child dependants, will continue to be payable under the same conditions as at present. The scheme will provide, for persons earning more than £14 a week where the incapacity for work or unemployment lasts for longer than a fortnight, for the flat-rate benefit to be supplemented by pay-related benefit, which will be at the rate of 40 per cent of that part of the claimant's average weekly earnings, in a previous income tax year, which lies between £14 and an upper limit or ceiling, yet to be fixed.

I should explain that the level of 40 per cent of gross pay was chosen after an examination of the real value of various levels of pay-related benefit in terms of replacement of the actual loss of pay during periods of sickness or unemployment. Very few workers take home the full amount of their pay. Stoppages of various kinds are almost invariably made and these include statutory deductions in respect of social insurance contributions and income tax. These statutory deductions, which arise out of payment of remuneration, are not made during weeks of unemployment or sickness and accordingly income replacement by way of benefit during such weeks, should properly relate only to the person's net or take home pay after these deductions have been made.

As I have indicated the main purpose of having benefits related to pay is to enable the recipient to maintain, during periods when he is not at work, [1332] a standard of living reasonably comparable to that which he normally enjoys. Children's allowances, where payable, are part of the family income and are paid whether the beneficiary is earning or sick or unemployed, and it is reasonable to add these payments both to the level of take home pay and to the level of benefit in determining the real value of the pay related benefit in maintaining the beneficiary's standard of living. The existing flat-rate benefit provides 40 per cent of gross pay up to £14. The 40 per cent of reckonable earnings in excess of £14 when added to the flat-rate benefit payable, therefore provides, in the case of single persons, replacement of at least 50 per cent of net pay at all pay levels while, in the case of married persons, the level of replacement is higher because of the addition of increases of flat-rate benefit in respect of dependants. The level of replacement of net pay, for example, at average weekly earnings of £30 would be approximately 65 per cent for a married man, 70 per cent for a married man with two children, and 75 per cent for a married man with four children. At earnings of £20 the level of replacement would be higher still, being 70 per cent for a married man, 78 per cent for a married man with two children and almost 90 per cent for a married man with four children. It could happen in the case of persons with large families whose reckonable weekly earnings are low that, when the amount of pay related benefit is added to the flat-rate benefit, the total amount payable would exceed the average weekly earnings on which the benefit was based. As the object of the scheme is to enable a person to maintain his standard of living it would seem illogical if the scheme were to provide for his income, during periods of sickness or unemployment, to be supplemented to a higher level than when he was working. This can be prevented by putting a ceiling or wage stop related to a person's pay on the total amount of benefit that could be paid to him and there is provision to do this by regulations.

As I have mentioned, the basic flat-rate [1333] disability and unemployment benefits for a single person, £5.55, represents approximately 40 per cent of £14 and a still higher percentage of normal take home pay in such a case. A single person earning less than £13.88 receives by way of flat-rate disability or unemployment benefit more than 40 per cent of his earnings or more than 50 per cent of his net or take home pay.

A married man in this category receives as flat-rate benefit for himself and his wife at least 75 per cent of his net pay. If he has children he receives a considerably higher proportion by way of replacement income. This varies from at least 95 per cent if he has a wife and two children, to well over 100 per cent if he has more than two children or has been earning significantly less than £14 weekly; and there is no wage stop in the case of flat-rate benefit. There is, therefore, nothing discriminatory about adopting the floor of £14 a week on weekly pay for benefit purposes in this scheme. It derives from the nature of the scheme, being automatic when regard is had to the continued existence of the flat rate benefit.

The ceiling, or upper limit of pay, which will be taken into account for benefit and contribution purposes will be prescribed by regulations. The level of this ceiling cannot yet be decided as the remuneration limit for the compulsory insurance of non-manual workers, which at present stands at £1,600 a year, affects the issue. As I have already announced on more than one occasion, I am anxious to have this remuneration limit abolished and I hope to be in a position to introduce legislation for that purpose shortly.

If this limit were to stand the ceiling or upper limit on reckonable weekly earnings for pay-related benefit purposes could not exceed the weekly equivalent of £1,600 a year, since if non-manual workers over that limit are excluded from compulsory insurance there would be no case for including the earnings of manual workers above that level for pay-related benefit purposes. When the limit is abolished, I will be able to prescribe a ceiling on reckonable weekly earnings for pay-related [1334] benefit purposes which will be related to the general level of wages at the time the scheme commences and which can be changed from time to time in line with changes in that level.

The average weekly earnings which will be used for the purpose of calculating the amount of pay-related benefit payable to a person will be based on his actual gross earnings from his employment which are reckonable for income tax purposes. These earnings will include all amounts paid by his employer which are taken into account by the Revenue Commissioners as earnings for income tax purposes. The Revenue Commissioners will supply to my Department the necessary information regarding earnings, to enable pay-related benefit to be calculated and paid. The information to be furnished in this regard will, of course, be restricted to the minimum necessary for our purposes.

I have no doubt that there may be some criticism of the use of earnings in a previous income tax year on the grounds that they relate to a past period and take no account of the rises in pay levels in the meantime. In fact, as it will be some months after the end of an income tax year before records of earnings become available, the gross earnings to be taken into account for benefit purposes may not be those in the most recently completed income tax year. However, power is being taken to prescribe by regulations the manner and the basis of calculation of reckonable weekly earnings for the purposes of pay-related benefit and it is intended that this power will be used to inflate reckonable weekly earnings so as to compensate broadly for the effects of the time lag.

Since the pay-related benefit will only be paid where there is title to flat-rate benefit the existing claim procedure will merely be expanded to ensure that for pay-related benefit purposes whatever information is needed to ascertain the amount of reckonable earnings in the relevant income tax year is obtained. In straightforward cases, and these should be the vast majority, all that the claimant will be required to supply will be his income tax registered serial number but in [1335] cases where difficulties arise he may be required to furnish further information. It is the intention that both the flat-rate and pay-related benefits will be paid together in one weekly payment.

The pay-related benefit will be payable for up to 147 days of unemployment during any period of interruption of employment, provided the claimant is in receipt of unemployment benefit. It will also be payable for up to 147 days in respect of incapacity for work during any period of interruption of employment, if the claimant is entitled to disability benefit. The payment in respect of incapacity for work may be made with occupational injury benefit, if the claimant would otherwise be entitled to disability benefit, or with maternity allowance.

The pay-related benefit will, in the ordinary course, begin to be payable after the claimant has been incapacitated or unemployed for two weeks. And here I must emphasise that the new benefit is not intended for the really short-term periods of incapacity or unemployment, that is those of less than a fortnight, as normally these should not seriously affect the claimant's standard of living. It will continue to be paid, for up to 147 days in either case, for as long as the beneficiary continues to be entitled to flat-rate benefit.

In the normal course a person claiming flat-rate unemployment benefit has three waiting days of unemployment before benefit becomes payable and he may then draw benefit for a further 156 days of unemployment before being subject to a new contribution condition for its continued receipt. The pay-related benefit with unemployment benefit for 147 days after a 12-day waiting period which will include the existing three waiting days for the flat-rate benefit, will bring the beneficiary up to the point where he has been paid 156 days flat-rate unemployment benefit. Similarly payment of pay-related benefit with disability benefit will normally cease at the point where the person has been paid 156 days disability benefit.

[1336] I should now like to say a few words about the financing and scope of the scheme. It is provided that the cost of the pay-related scheme will be borne by contributions from employers and their employees. The contribution will be pay-related and thus the cost of the scheme will be spread equitably over all pay levels between £14 a week and the ceiling to be fixed for benefit purposes. I am not satisfied that the taxpayer, through the Exchequer, should be required to contribute to a scheme which is not of general application and is, in fact, designed to provide the greatest benefit for higher paid workers and from which lower paid workers are excluded. The pay-related contribution to be levied on employers and employees will be set at a level adequate to cover the total cost of the scheme.

As I have already indicated, it has been arranged to have the pay-related contributions collected by way of the income tax machinery of the Revenue Commissioners and paid into the social insurance fund and the nature of the pay to be taken into account for pay-related contribution purposes will be the same as for benefit. Instead of using the earnings in the preceding tax year however, the contributions will be based on and collected from the person's actual earnings in the income tax year then current. These earnings will, of course, be the earnings which will be the basis of the person's entitlement to pay-related benefit in a subsequent year.

It has not yet been possible to finalise the costings of the scheme. Apart from the question of the ceiling on reckonable earnings yet to be determined, another problem still not fully resolved is that of financing the scheme in the initial stages. It is not possible at this stage, therefore, to determine the rate of contribution. Subject to what I have already said, the cost of the scheme has, however, been estimated to be of the order of £7 million to £8 million a year and the rate of contribution is expected to be about 3 per cent of reckonable earnings, of which 1½ per cent will be payable by the employer and 1½ per cent by the insured person. The contribution rate as finally determined [1337] will be prescribed by regulations as will also the ceiling of pay up to which contributions will be levied.

The scheme will apply to all insured persons in respect of whom the ordinary full rates of flat-rate employment contributions are payable under the existing social insurance system. The scheme will thus cover most persons who are in industrial, commercial and services type employments. These are estimated to number about 680,000 persons at present. When the remuneration limit of £1,600 a year for compulsory social insurance is removed, this number will be increased by an estimated further 30,000 persons. As I have already mentioned, it is not possible, at the moment, to bring into the scheme all persons whose insurance at present covers them for disability and unemployment benefit. The main groups thus affected are male agricultural workers, numbering about 38,000, and female agricultural workers and domestic employees who are estimated to number about 15,000. The reason why they cannot be brought in is that it will not be possible within the income tax collection system at present to collect pay-related contributions from them or to provide the information regarding their earnings which would enable pay-related benefit to be calculated. The Bill would provide for power to bring into the scheme by regulations classes of employees other than those in respect of whom the ordinary rates of employment contributions are payable. It is my intention to pursue this matter with a view to extending the scheme to include those classes by regulations. Any decision in this matter, however, would revolve largely on the feasibility of collecting pay-related contributions from the particular class being considered.

The scheme will be brought into operation by an order or orders which will be made by me. I am anxious that the scheme should be brought into operation as soon as possible. The Revenue Commissioners are, however, unable to undertake the collection of the pay-related contributions from a date earlier than the 6th April, 1974 which is the start of an income tax year and also the date on which the [1338] collection of pay-related health contributions from various categories of persons including those insured under the Social Welfare Acts will commence. However, while the collection of pay-related social insurance contributions cannot start until 6th April, 1974, I hope to be able to start payment of pay-related benefit some months earlier and to this end I am consulting with the Minister for Finance with a view to determining the earliest date from which this can be done having regard to the usual budgetary considerations. The Bill, therefore, includes provision for advances for this purpose from the Central Fund to the social insurance fund, any such advances being on a repayment basis. The amounts of the advances, the terms of repayment and the effect of such repayment on the level of contributions have yet to be decided.

The proposals in this Bill represent a significant advance in the development of our social insurance system. Not only are they important in regard to the increased benefits they will provide and because they constitute a major advance towards bringing our social security code into line with the social codes of the EEC and other countries, but they will pave the way for further appropriate developments in our social security code in the wider field of long term benefits and pensions. As soon as this new scheme has got off the ground and is operating smoothly, I intend to use the experience gained and the basic machinery established under it to develop complementary schemes of pay-related pensions within the social insurance system. I should sound a warning, however, that even with the best will in the world these proposed developments cannot be brought about overnight and any such changes must in the ultimate be considered in relation to general financial and economic circumstances and developments in other services.

I hope that the explanations I have given here coupled with the information contained in the explanatory memorandum circulated with the Bill will give Senators a fuller understanding of the proposals in the Bill which are, of course, highly technical and [1339] specialised. A great deal of the details of the scheme will appear in regulations to be drafted under the provisions of the Bill. Development of the procedures for collection of contributions and also for the payment of the supplementary benefits has already entailed a great deal of work both in the office of the Revenue Commissioners and in my own Department but much still remains to be done.

I have great pleasure in recommending this Bill to Seanad Éireann for early and favourable consideration.

Mr. Reynolds: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  On behalf of the Fine Gael Party, I should certainly like to welcome this Bill. It is many years since we, in Fine Gael—I think in the 1965 general election—clearly embodied a similar type pay-related benefit scheme in our Just Society policy. It was also embodied in the Labour Party's policy in the last general election. In 1949 the Government in power and the Minister then dealing with social welfare published a White Paper on social security. They proposed that social insurance should be extended to cover persons over 16 years of age who are in employment. The Government Party themselves mentioned this in their Third Programme for Economic Expansion in 1969. After a long delay we get the Bill today.

As the Minister said in his opening statement, contributions will not be collected until 6th April, 1974, which is the commencement of the income tax year. It is the intention of the Minister to grant pay-related benefit to people who are justly entitled to it. Everybody knows that when people become unemployed or ill through no fault of their own, they are not able to earn and their incomes should be supplemented to almost the same extent as when employed. Social Welfare payments that have been granted as a result of the budget are usually paid in October or November. It, therefore, looks as if it will be October or November of next year, or even January of the following year before this scheme will be put into effect.

The most disappointing thing about the scheme is its short duration. Pay-related [1340] benefit will only be paid for a period of approximately 5½ months. One wonders if the Minister is being fair to people who have been paying contributions and taxes generally for a long number of years. I do not think that it is long enough and the Minister should extend it to at least a 12-month period.

The only income mentioned is £14 per week. What would become of people who have an income of less than that? There are many people in this country in receipt of an income of less than £14: some with as little as £10 who may be apprentices. But these are insured people who are paying income tax. Are they going to be deprived of benefit under the pay-related scheme? As long as a person is in insurable employment, he should qualify for benefit.

There are a few other cases that must be mentioned at this stage. Take the case of a widow whose husband was insured and after his death she finds herself having to maintain herself and the children. It does not matter how many children, she will not qualify for pay-related benefit.

This scheme is only piecemeal at the moment. There are 53,000 widows in this country whose husbands were in insurable employment. These widows who are in receipt of a contributory pension look after 18,000 children and I do not think any Minister could be serious in asking this House or the Dáil to pass this Bill without thinking of widows and their children. I probably feel more aggrieved about this than any other Senator because I am the son of a widow. There were seven of us in the family and I was only ten years old when my father died. I know the hardship my mother and every other member of the family endured while she reared us and endeavoured to give us a fairly good standard of living. We could not compare in any way with those whose fathers were still living.

The flat rate of unemployment benefit to a widow and three children is £10.10 per week and that divided by four gives each person £2.52. I do not [1341] think it is possible to live on that amount. Not alone should the benefit be paid for a six month period but it should be paid to a widow with children until each of the children become of age. I hope the Minister will have another look at this Bill.

The agricultural workers are not going to be graded as second, third or fourth class citizens but as fifth class citizens. People employed in industry will qualify for pay-related benefit but the agricultural worker will not qualify for it. In 1971 we had 38,000 agricultural workers and the total numbers had been dropping for some years prior to that at the rate of 10,000 per year. There are about 28,000 agricultural workers at the moment. The reason they are not being taken into the scheme is that their employers would have to make PAYE returns to the Revenue Commissioners, or some other reason. Whatever the reasons they could be easily overcome by the Minister's Department. Ninety-eight per cent of these people must be insured. It would not be a big job for the officials of the Department of Social Welfare to check to see how many of them there are, to what benefits they are entitled and to give it to them just the same as their opposite numbers in other employments.

Unemployment benefit for an agricultural worker, getting £20 per week, is £5.55. An industrial worker who is single and earning £20 per week will get £5.55 unemployment benefit plus £5.80 pay-related benefit, which will give him an income of £11.35. However, the same deductions will be made from them for income tax. Admittedly the agricultural worker's stamp is slightly cheaper than the industrial worker's stamp.

Often it does not pay to live in a rural part of the country—certainly it will no longer pay to live there—and instead of the figure dropping at the rate of 10,000 per year I am afraid it will drop at a much higher rate.

The payment of contributions will be shared equally by employee and employer and the Minister said that 3 per cent of the gross wages would be paid. That is not a surprising figure—I [1342] thought it might be higher—but it is acceptable enough. It is a bit unfair to introduce a scheme like this and leave out a number of people who should not be left out. It would not be unreasonable if the taxpayer was asked to make a contribution towards this scheme in order to ensure that widows and agricultural workers would be included in it. It is not an unreasonable request to make and I doubt if anybody would begrudge the contribution. I welcome the scheme and hope that the ceiling of £1,600 will be removed shortly. I can see this being a rather slow process because the figure of £1,600 income per year is used as a norm not only by the Department of Health but by the Department of Local Government, who use it in respect of the payment of supplementary grants by county councils. The figure of £1,800 is used in determining loans for people in the middle income group.

In my opinion it will be some time before the Minister can satisfy himself that this figure will go although he says that it will go shortly. I hope he is right on that. It is difficult to discuss a social welfare Bill and keep within its scope but if it takes as long to revise the £1,600 figure as it has to take steps to revise the non-contributory pension of £52.50 per year which stands since 1952, God help us.

Mr. Crinion: Information on Brendan Crinion  Zoom on Brendan Crinion  It amuses me when I hear members of the Opposition parties saying that they had this proposal in their election campaigns in 1965 and 1969. However, we know what the people decided. In framing a new social welfare scheme the Government must feel their way. Senator Reynolds stated that 147 days was a short payment. Fianna Fáil have been responsible for all the improvements made in the social welfare benefits. The contributions made to the social welfare benefits by the Opposition when in office were pitifully low. The old age pensioners have got an increase in every budget under Fianna Fáil.

I agree that agricultural workers should be brought under the scheme but is Senator Reynolds prepared to go to the rural areas and tell the people they must have the tax inspector [1343] work out the tax they should have paid last year? He might not be too popular in advocating such a policy.

The agricultural workers will be brought into this scheme as soon as possible but the scheme has been designed to meet those who get a higher rate of pay but who suddenly drop to the social welfare level. If a person who has £30 per week falls ill and cannot work for a long period, great hardship can be caused to his family.

Mr. J. Fitzgerald: Information on John Jack Fitzgerald  Zoom on John Jack Fitzgerald  So it is better to be on the poverty line all the time?

Mr. Crinion: Information on Brendan Crinion  Zoom on Brendan Crinion  No. This Bill is designed for those who are unemployed or ill for prolonged periods to enable them to have a reasonable amount coming in and which would be relative to what their actual earnings had been.

I note it is being collected through income tax and that the benefit will be paid from that source. From my experience with the income tax section it is difficult to obtain quick decisions. We have experience of this through the Board of Works. There should be a system of assessing incomes quickly. I am sure the Minister will ensure that there will not be any undue delay in issuing those contributions.

Forty per cent is a realistic figure. A total of 147 days unemployment should be more than ample for the present to give the person a chance of obtaining other employment or to be trained for a new job.

This matter was included in the Third Programme for Economic Expansion and we have lived up to our promises in introducing this Bill. I note that the Minister hopes at an early date to introduce an insurance scheme to cover all citizens, including the self-employed and those earning more than £1,600 per annum.

New Bills take time to come to fruition. Care must be taken in their drafting to ensure they will be fair and will meet the idea put forward. I was interested to read in a recent issue of a [1344] trade union periodical available in the Library that our social welfare benefits fall far behind those in Northern Ireland. Economic growth and social welfare benefits go together. We have outlined that very forcibly over the years. As our economic growth improves we must also increase our social welfare benefits and bring in new schemes for the less well-off people in our community. The Minister in his Second Reading speech mentioned that he hoped to bring in pay-related pensions in the years to come. Our economic growth must continue to improve in order to provide schemes that will benefit our people.

Mrs. Desmond: Information on Eileen Desmond  Zoom on Eileen Desmond  We, in the Labour benches, welcome any measure designed to improve the social welfare services. We are concerned that so far schemes have not been brought forward to eliminate the poverty we all see around us. I regard the Minister's proposal to introduce pay-related pensions as a step in the right direction. This is by no means a new concept. It is already in operation in many countries. We all agree that it should be in operation here. It would eliminate a great deal of hardship. If our social welfare benefits are designed to provide security against illness, unemployment, or misfortune generally the rate of benefit must be as closely related as possible to the normal income of the family.

At present we have a flat rate benefit of £5.55 for a sick person. A sick person living alone is not an unusual phenomenon here. All over the country there are sick people living alone who have to survive on this very small sum of money. By virtue of the poverty imposed on them by this paltry rate of sickness benefit their recovery must be slowed down. The rate of benefit for married couples is also inadequate. All flat rates are inadequate. Therefore we welcome any supplement that this measure provides.

The Minister stated that the scheme will be financed solely by the employer and employee and no contribution will be made by the State. One could accept that in so far as the scheme is limited to people on higher rates of income [1345] One might use the word “higher” when referring to incomes in excess of £14 per week. With its limited application a contribution from the State would not be acceptable at this stage.

I should like clarification from the Minister on one point. He stated that the rate of contribution would be roughly at the rate of one and a half per cent from the employer and the same figure from the employee. This would be based on reckonable income. I do not know if by “reckonable income” the Minister means the total income or the difference between £14 and whatever income the person might have. If the total income is reckoned it would discriminate against the lower paid worker. Proportionately he would have to pay a higher contribution. I hope the Minister regards the “reckonable income” as the difference between £14 and the actual income the employed person has. That would be fair and equitable.

We have all heard criticism of the benefits people receive for their contributions which increase every year. The optical, dental and appliances benefits are limited. They are limited, first of all, in the contribution made towards them in respect of the employed person and also in that they are not extended to the employed person's wife and family. The expense incurred by the employed person in regard to these services is covered only to a very limited extent under the social welfare services. An increase in contributions needs to be justified before it is accepted by the workers.

The Minister made the point that there was nothing discriminatory in maintaining the percentage. The system as it applies at present is discriminatory towards women workers. Women in general pay a lower rate of contribution than men but when it is applied to their rate of pay they are in fact paying more. I make that point to put on record my approval of a pay-related scheme of contributions and benefits.

Senator Reynolds raised the point that there is nothing in the scheme to assist those whose incomes are under £14 per week. They are numerous. The [1346] average woman worker's income is still under £14 per week. There are, I am sure, men whose income is also under this figure. We are very concerned about those people. We speak of maintaining standards but these people have never had standards. I ask the Minister to ensure that the aim will be to improve their position. He should also ensure that any system of benefit, such as this, is not a substitute for reasonable flat-rate benefits for people whose income is under £14 per week. This would make life easier for them.

I agree with Senator Reynold's view that in principle all workers should be included. Some difficulty may be experienced in collecting contributions from employers of farm workers, domestic workers et cetera, but this should not exclude them from the Bill. The Minister should have included every category of worker in this measure. If difficulty arose in operating the scheme he might have to defer it until an acceptable, workable system of collecting contributions could be worked out. To exclude workers in principle is very wrong and unjust. That should not be written into a Bill of this nature. In this connection I am speaking not only of farm workers but also of domestic workers. It is discrimination to distinguish between these two sections of workers. They have been left out of many measures which have come before the Houses of the Oireachtas in the past.

The Minister spoke of extending the scheme to include other categories of social welfare recipients such as old age pensioners and widows. I agree wholeheartedly that this should be done but I was disheartened to discover that the Minister will not be able to make the provision under this measure or in the immediate future. The Minister spoke of when the scheme is operative but it will not start until 1974 and one can imagine the delay before the Minister can extend it to old age pensioners and widows.

I am not making light of the problems of old age pensioners but I want to make a particular plea on behalf [1347] of widows. All the reasons which make such a system as this necessary are also applicable to the case of widows. To maintain a standard of living is very difficult for women when they become widows. Their commitments at the time of becoming widows are enormously heavy. They may have large mortgages on houses and young children to rear and educate. They are being asked to do this on half their former income. Very many of them are asked to do it on a third of their former income under what we grant them in the present scheme of social welfare payments.

All the other difficulties of widowhood are greatly increased by the financial burden they have to bear. When we know people personally we realise the enormous hardship they have to suffer. The husband may have had very good wages and even worked overtime in order to provide extra luxuries for his family and then he is no longer present. The wife must shoulder all the burden because we have no adequate scheme of social security for widows. Therefore, I cannot see the reason for introducing such a scheme and excluding widows. I hope that before the Bill is finally passed provision is made for widows. It is poor consolation for them to hear that when this scheme is operational in 1974 the Minister in charge will then consider extending the scheme to include them.

There is also a need in respect of deserted wives. Their case could not be made better than was done by the programme on television last Saturday night. Through that programme, the various women's organisations and the AIM group highlighted the particular problems not only of deserted wives but of women generally. I am saddened that, in a Bill such as this, domestic workers and women workers generally are excluded.

While I welcome this measure, it is certainly no substitute for a new code of social welfare, new and radical thinking on social welfare and on the needs of those who must depend on social welfare. We welcome it as a first step only but there are other steps urgently needed. The measure is vague [1348] in so far as the ceiling of contributions and the total cost of the scheme are concerned. It is limited in its application. However, the principle is good and on that account we welcome it but we hope that it will be extended very shortly to include the categories I mentioned.

Mrs. Farrell: Information on Peggy Farrell  Zoom on Peggy Farrell  This legislation is the start, we hope, of a whole new scheme which will make the lot of the worker much easier. Senator Reynolds found many faults with the scheme and did not give it much praise. He said it would take a long time for the scheme to become operative. He must not have read the Minister's opening statement very carefully. The Minister said he hoped to start the scheme early in 1974; since it would not come into operation until 6th April, 1974 the collections would not have started but he would borrow money from the social welfare fund to finance it in the meantime.

Senator Reynolds also took exception to the fact that it would take a long time to go from £1,600 upwards. I draw his attention to the fact that the limit was £1,200 in 1968. In three years it went up to £1,600. There is nothing to say that we will not accelerate this progress and have a higher income ceiling very shortly.

There are many claims now in regard to socialism. Fianna Fáil is now being dubbed as a conservative party. Anybody who takes the trouble, especially young people, to examine the legislation put forward by Fianna Fáil will realise that they are not a conservative but a very socialistic party. They are very concerned with workers. They have introduced many benefits for them. Since we are supposed to be ridden by employers, I am disappointed that there is no cover in this Bill for any employer who might be disabled or out of work. All the benefits in this Bill are for the workers. In the Bill we read:

The contributions will be from employers and their employees. The pay-related contribution to be levied on the employers and the employees will be set at a level adequate to cover the total cost of the scheme.

[1349] This is only just. But when we talk of employers have we visions of people who employ 400 or 500 and who are chauffeur-driven or are we thinking of employers, who are known to so many of us, who employ two and three people on whom the burden of paying all these contributions is a very heavy load? Most of them would welcome these benefits if they could be applied to themselves.

Many employers at the end of the year do not have £1,600 to call their own. If they become unemployed, they are not entitled to any benefits. If they are sick, they cannot get their expenses for hospitalisation unless they are contributing to the Voluntary Health Scheme or the new £7 a year health scheme.

I believe this Bill fell short in that it did not take cognisance of small employers who would avail of such a scheme. Self-employed people are often forgotten altogether. Many workers dream of the day when they will become self-employed but when they become self-employed and employ one other person they then become employers and have a very heavy burden placed on them as a consequence. This is a matter to which the Department should give serious thought when drawing up this type of legislation.

If this money is to be collected in the same way as PAYE, I can see difficulties arising. Anyone with experience of dealing with PAYE cards knows that, after the 5th April any year, cards are received for employees setting out two different types of tax free allowances for people who have sent in exactly the same kind of returns. About four months afterwards, for some strange reason, one can get as many as four more cards for the same employee. This is continually happening in the Revenue Commissioners office. If the same type of confusion arises with the collection of social welfare benefits, it will create a lot of work and trouble for employers. Our good and socialistic party, Fianna Fáil, think nothing of asking employers to undertake this work of collecting taxes for them free. Employers get nothing out of it except trouble. I am sorry the Minister is not [1350] here to take note of my remarks but I am sure they will be conveyed to him. Employers would not mind collecting this money if they were allowed to join in the scheme themselves. We need to do something for our employers. Too many of our small employers are being victimised.

I join with Senator Desmond in saying that I should like to see widows catered for a little better than they are at present. I know that all schemes have to make a start somewhere and the greatest possible number of people must be catered for first. The amount of money available for schemes such as this is very limited. I am sure the Minister would like to become Santa Claus and give every class and category of person the amount of money we would like to give them. We have travelled a long way in our social services over the last few years. We are bringing them upwards very swiftly, indeed, much more swiftly than was envisaged ten years ago. Of course, the more we get the more we want and no matter who is served or how well he is served there will always be someone who will not be getting the benefits he deserves.

Even though I may appear to have taken the employers' side in speaking on this Bill, I should like to congratulate the Minister on this very welcome addition to the social welfare services. I hope the implementation of this scheme will not place too great a burden on employers or employees. The scheme has a great future so long as it does not weigh too heavily on any particular sector.

Mr. W. O'Brien: Information on William O'Brien  Zoom on William O'Brien  I welcome the Bill but it strikes me as strange that its provisions will not be implemented until late in 1974. We must take into consideration the value of the contribution in 1974. I can see amending legislation being brought in here in 1974 asking to delete the £3.60 in some cases and the £5.80 in other cases and bring the figure up to a more realistic level. At the rate the cost of living is increasing today, if the Minister wishes to increase any benefits he must do so as soon as possible because within a few months they are no longer realistic [1351] because of the continuing reduction in the value of the £ sterling.

Some Senators referred to people under £14 not being included. This is something that should be reconsidered by the Minister. The Bill was designed to maintain a certain standard of living when the weekly income is not available because of illness or unemployment but a reduction from £13.95 to £5.55 in weekly income would make a tremendous difference to a person's standard of living. There are quite a number of people in this country earning less than £14 a week. Many hotel employees earn only a basic wage of £12 because tips from guests are taken into account. If our cost of living continues to increase at its present rate, I fail to see how these people can survive on such wages.

Reference has been made to agricultural workers and their position is alarming. It has been rightly stated that it is not possible to bring all sections of our people into the scheme but the fact that our people working on the land are deprived of the benefits of this scheme will, in my opinion, do untold harm to our economy. We read in the newspapers almost every day reports of meetings of the IDA pointing out the number of people being placed in industry and which paints a picture of the future five-year plan. The number of people who have left agriculture during the past five years has exceeded by far the number of people who have been placed in industry. That fact alone should force the Minister to think again.

Every incentive possible should be introduced, to encourage people into industry. In view of our entry into the Common Market and of the great prospect agriculture holds for us in Europe, we should in no circumstances do anything that would remove the workers from the land. It is something that should be taken very seriously because our exports play such a large part in our economy.

It would be unreasonable to ask the Minister to cover all fields but I think widows should be included. To me this Bill is a greater advantage to the highly paid workers than it is to the poorer [1352] sections. We must forget about high standards and should talk about ordinary comforts and about existence. We ought to make sure that all sections of the community have enough to live on. For that reason the lower income group should get priority.

As I looked at the figures something tempted me to ask: what would be the prospect for a single man with £30? If he becomes ill he gets £11.95. As a single man at the moment, he would not qualify for any health services. If the income which he derived from the scheme were to be taken into consideration at the moment, he would be denied a free doctor, according to the present standards of the health authority. Somebody may tell me I am wrong. I am open to correction. I sincerely hope that the Minister will have a consultation with the Minister for Health and notify all health boards that it is the intention to raise the ceiling necessary to qualify for a health card.

When I read the Bill I understood from it that pay-related benefits were paid on the previous income tax year. Should that be the case, what would the position be if, for the first six months of the year, a man worked in England and came to Ireland for the second six months? Would there be cooperation between the two countries to make benefit available to that man?

Professor Quinlan: Information on Patrick Michael Quinlan  Zoom on Patrick Michael Quinlan  I should like to welcome this Bill. It brings in a principle of which we all approve, that is, helping families in times of distress to maintain their standard of living, or at least it makes an effort in that direction. As the Minister has said, these schemes are not in any way novel; they exist in many other countries, including England. We can therefore welcome what the Bill contains, and we can quite rightly advocate the inclusion of those other groups who we think should be included.

The most disturbing feature I find in it is the rather casual way in which half the scheme is loaded on to Irish industry and the other half on to the workers. It may be said that, as far as the workers are concerned, it is a type of insurance for them and that [1353] they are getting something from it. However, as Senator Farrell has said, there is nothing comparable for Irish industry, especially at a time when industry is having a hard fight to survive. We cannot casually load additional costs on to Irish industry with a stroke of the pen. One and a half per cent increase in the wage bill for the classes covered by this is, to many industries, quite a sizeable addition. It is one that could affect considerably the competitiveness of many industries. It is a wrong facile approach that we have been using much in all sorts of schemes; that is, putting one half of the cost on to the group concerned, and the other half on to industry. It is not as if Irish industry was strong and sturdy and capable of facing such burdens. I suggest that schemes that do not add to the cost of Irish industry should be made available, but they should not add to the burden on the taxpayer. If you want to raise the additional 3 per cent from Irish industry, why not arrange that the industries concerned would, with the agreement of employees and management, work an additional 15 per cent or one and a half hours in the week? That one and a half hours could be devoted to the provision of this worthwhile social fund. Indeed, if we adopted such an approach, it would be quite easy to extend the scheme so as to include the widows of former workers in those industries. It would help the workers and industry if idle machinery were used to generate the money necessary. By those means you would maintain both the wage packet of the workers and the competitiveness of industry.

In the time ahead we are likely to have many further claims of the nature mentioned in this Bill, types of insurance funds for worthwhile social purposes. I would therefore suggest that the contributions from the extra hour or two worked in the week is the way to meet that, and not simply to keep on loading cost on to Irish industry which is already overburdened. When examined in the European context, our industries could afford to carry this, because, by and large, the work week in this country is shorter than the work [1354] week in Germany, France and most continental countries. We require a greatly modernised and revolutionised social code, with all these pay-related and other benefits, but let us get that by increased work and increased utilisation of the machinery and the premises of Irish industry and not merely delude ourselves into the belief that by legislation we can simply put on another 2, 3, 4 or 5 per cent on to Irish industrial costs any time it pleases us to do so.

I agree with Senator Desmond on the necessity to extend those provisions as soon as possible to the widows who should have been included from the start. She also mentioned deserted wives. We have seen television programmes about this and what keeps the Government from legislating on these matters. We saw how quickly the Government got the Offences against the State Act and other legislation through when it was required. What is keeping them from bringing in a proper code in relation to deserted wives? Surely the Minister's Department should be able to draft the legislation in a week, and I guarantee him that every Member of the House would agree with me in saying we would put it through in a short time if we got the opportunity. I cannot understand why we are so remiss in this.

In addition, I should like to make a plea for the self-employed and for the salaried workers who are outside this scheme and who are beginning to feel what unemployment means. In the United States the professional groups are now figuring very much in the unemployment lists. That is bound to affect us here. There should be some help given to such people, such as schemes that may be advanced through insurance or otherwise to help them over such periods. The State might help in this regard by allowing the proceeds of such schemes to be classed for earned income allowance in the income tax code. This would greatly help those people who would be either unemployed or have serious illness thrust upon them. This is common justice. When they have made their contribution under the income tax code down the years, they should get [1355] help when their incomes have dropped much below that level.

With those reservations I commend the Bill, but, again, I ask the Minister to find some other way to finance these in his future legislation rather than breaking the back of Irish industry and also depleting the wage packet of the worker. Let them work an extra few hours to get the money to provide the wherewithal for all those necessary social schemes that they rightly want.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  In case anything I might say in the short speech I intend to make here this afternoon would confuse the position, I should like to say that I certainly welcome the pay-related social welfare scheme, even if I find it coming late and in a form I do not find adequate. I do not share the attitude of people who are constantly engaged in running down the nature of the Irish achievement and who do not measure adequately or fairly the nature of the social welfare provisions we have, having regard to the nature of our social and economic structure and the comparative wealth of our people.

There are a few rather obvious points which are worth making if I can make them coherently. It is symbolic enough that in this week before Christmas we have a Social Welfare Bill which does not contain a single provision which is designed to benefit the worst off of our people. This is a Social Welfare Bill designed to benefit those rather better off than the worst off. It is a social income distribution Bill to benefit people who are outside the category of the worst off. For clarity purposes it is worth emphasising what the Minister made clear in his introductory speech that not one penny of the cost of this operation—apart from the administrative cost, if there is any which is not charged on the social insurance fund—will come from the Exchequer. This is a redistribution of incomes between peoples of a particular income range. It is worth noting that this does not benefit at all and may ultimately worsen, if it has any inflationary consequences, [1356] the position of anybody with less than £14 per week.

It does not benefit agricultural or domestic workers. It does not provide for pay-related benefits in the form of pay-related retirement pensions, pay-related old age contributory pensions, pay-related mortality benefits, pay-related contributory widows pensions nor pay-related invalidity pensions. It does not affect the position of non-manual workers with more than £1,600 per year unless they have voluntarily continued their contributions.

When considering the slowness, one should remember just how slow. It is a party point if you like, but it is still a point. This was the declared policy of this party as far back as 1965. It was announced as a Government decision in March, 1969 and it will come into effect in the beginning of 1974. It has reached this stage slowly and there is much yet to be defined before we know where it will finally reach. The upper limit is not fixed yet to reckonable earnings for the purpose of determining what is to be the pay-related benefit.

I am not saying that all the judgments which I discover as involved or implied in this legislation are wrong. Some of them are right, for example, the statement by the Minister with regard to the undesirable effect of high flat-rate benefits. I accept that, but if I understand correctly the Minister's statement in the Dáil, the existing flat-rate benefits have already some of the undesired effects in that in particular situations these yield to persons benefits higher than their incomes.

This is a social evil which should be cured by appropriate legislation such as a Social Welfare Bill. One suggestion was made, that some particular fiscal relief might not be given in such cases; the other might be to accept a new notion, that where one discovered such a situation there would be a legal statutory minimum income payable. This may be wide of the mark from one wholly inexperienced in this field, but it is an example of the situation which must be faced.

It has been stated here today there is no provision for the employer; there [1357] is no provision for the self-employed. There was a mention of comprehensive social insurance which would have the effect of making possible the abolition of the means test.

Could the Minister give us some idea how soon such a scheme might be conceived as practicably possible? I cannot make judgments without some guidance as to what is involved. The Minister's advisers should enable him to give some indication of how imminent a decision by the Government might be with regard to such a matter.

Am I correct in thinking that the effect of abolishing the £1,600 maximum for the compulsory income of the non-manual worker would be to add only 30,000 to the number of persons who would come within the scheme, pay-related and otherwise? If this is correct, I make the percentage of the total of the employees who are covered by the existing scheme as less than five. If the Minister contemplates introducing this legislation soon, what are the factors which make it impossible for him to offer us this legislation now? Why, if it is imminent do we need legislation on the point? Why does the Minister not ask us to give him power by order to abolish that limit if abolition rather than extension is what is intended?

With the development of exporting industry and the tax reliefs available for exporters; with our membership of the EEC and the effect of that membership on our farming community, significant economic development has taken place or can be foreseen which would change the nature of our economy to one making possible that kind of comprehensive scheme without which we will remain dissatisfied with the progress which we have made.

We are not just speaking about social progress here today or a desire to harmonise our code with those of the other EEC countries. We should query whether proportions of 50/50 as between employer and employee are correct. Are the proportions different in the other EEC countries? We are also talking about taking steps which make possible future economic progress as well. The two are intimately [1358] linked and it is no longer possible for wise men to think of personal wealth accumulation without being conscious of the necessity, for their own enjoyment, of such social progress as will generate social stability.

Though dissatisfied with slowness of progress and not happy with all I see here today, I see enough to be prepared to welcome the Bill.

Minister for Social Welfare (Mr. J. Brennan): Information on Joseph Brennan  Zoom on Joseph Brennan  I am delighted that all those Senators who have spoken welcomed the Bill. This is a new dimension in our social welfare code. It will be written into the code as another scheme, different from any we have ever had.

Before dealing with specific points, I should like to state that I have introduced the Bill as an opening to many new schemes in social welfare that were not possible before. We are all agreed on the desirability of a pay-related scheme. The difficulty of implementing it must be obvious to all. We have not tabs on everybody's ear such as we have with cattle but we must have this on the people we deal with in relation to this pay-related benefit scheme.

This is the first time we have been able to get machinery prepared to take in 680,000 persons which though small in number is too many to leave out until we are ready to take in everybody as was suggested by Senator Desmond. The Revenue Commissioners have computerised the earnings and what the pay-related contributions and the pay-related benefits will be. Having got that under way we will have opened the road to giving consideration to long-term benefits some time in the future. The sooner the better. When I say long-term benefits I mean pensions. This is a different kettle of fish altogether. We can extend the scheme to any type of insured person so long as we are prepared to calculate the cost. That brings me to the criticism of the Bill.

Every Bill I have had the pleasure of introducing in my short time as Minister for Social Welfare was welcomed, [1359] but heralded by complaints that it did not go far enough. Each year saw something else added. The schemes climbed and spread, improving in depth and scope. But no sooner had one a new scheme on the books than there was a clamour for its extension to this, that and every other section.

When I first introduced free travel arrangements they were only applicable to old age pensioners. They have been extended to all persons over 70 years of age and to British pensioners. Appeals have been made to me to extend the scheme to widows and invalids. There is hardly a section of the community which has not been suggested.

When I introduced the relative allowances for persons taking care of old age pensioners who otherwise would be alone, they applied first to persons who had to give up insured employment. Under pressure that all sections be brought in we extended the scheme to non-insured persons. We further extended the scheme to male persons. I am under continuous pressure to extend it even further. Like this scheme, it was the beginning of a good scheme that was capable of being developed and extended in the right direction. In bringing in any scheme, one must make a beginning.

We have had social welfare for a number of years. It is relatively new in any country. It was after the last war that social welfare schemes began to be developed anywhere in a worthwhile manner. We always seem to be of the opinion that we can have this, that and the other scheme at no cost to anyone. Everybody must know that the only thing that sets a limit to my social conscience is the ability of the people to pay for these schemes. It is a simple thing to bring legislation through both Houses of the Oireachtas; by merely bringing in legislation we could give £25 a week to widows if somebody could only produce the money for me and show where the priorities lay. Widows are lobbying and putting up a strong case for improvements in their pensions. However, no lobby will make me change my priorities. Widows are one of the top priorities, but there are many [1360] others. As I said in the Dáil, a woman with an invalid husband is in a worse position than a widow. She has not, perhaps, the numbers to make a strong lobby for her case. I have a conscience and I know she is in an equally poor position. A widow without dependants is little different from a single girl.

There are a great number of things I should like to do. Widows with dependants take top priority with me, but they are only one of the many sections. There are invalids, old people and the blind. These people cannot be cast aside in order to give all the benefits to one section. If we had sufficient money we could bring them all in. Thank God, every year seems to make it possible to get more money. To give one shilling per week to the welfare classes would cost a few million pounds. It is only a drop in the ocean. Nobody would feel he had got anything. It is the taxpayer who pays, irrespective of which way it is levied.

Senator Quinlan made the extraordinary suggestion that the costs should not be levied on industry or on the taxpayer. I throught the Senator would leave it at that, but he further suggested that workers be asked to work a quarter of an hour per day longer. We must discuss practical things here. As Minister for Labour, I am under pressure from workers to shorten their hours.

This legislation, which opens the way to new dimensions in the social welfare code, is levied at first on the people who will benefit and that means people who draw more than £14 per week. They will pay approximately 3 per cent of their earnings above £14 up to a figure that will be fixed later. At the moment we have the insurability limit of £1,600. They will draw approximately 40 per cent of what they earn above £14 up to this particular ceiling. It is to enable people who have become accustomed to certain standards and who are geared to a way of life through a certain income not to suffer undue hardship when they have long terms of sickness or unemployment. The new scheme will not apply for the first two weeks, but the workers will get the flat-rate benefit for that time. It will not [1361] extend beyond the six months laid down in the Bill which, I am not ashamed to say, corresponds with the British system. If we want a better scheme we either increase the cost of the stamp or ask the taxpayer to pay. It is immaterial. The people who produce will pay.

I agree with the last speaker who said that social welfare has to be thought of in isolation and not tied to economic planning. It is an important part of the whole economic set-up. We must always have regard to the ability of the people to pay. The people who pay are those who produce. The resources available to us depend on the extent to which we can go in redistributing the wealth that section of the community have. We are moving rapidly. People anticipate that we are going to save a few million pounds as from January next. Figures of from £20 million to £40 million have been quoted. I am sending a submission to the Minister for Finance in relation to the preparations for the next budget and £30 million will not work a miracle for our welfare classes. I have put down proposals that would cost three times that amount. We cannot expect to get all that money. People will crib. We will have people standing up here saying the new taxes are too severe, the stamp is too costly and that we are putting a load on industry.

Someone made reference on television last Saturday to the plight of deserted wives. There was a reference to the “miserable pittance” given. Up to two years ago deserted wives got no allowances. I thought it was a great help when she was put on the same level as a widow. How did she manage in the past? At least she is getting some allowance now. She got nothing prior to this. As soon as some allowance is given somebody will refer to it as “a miserable pittance”. We should not be so ready to denigrate the amounts we pay in social services here—in this island of a couple of million people, only a small number of whom are producers. The rate at which social welfare allowances have grown in the last ten years is greater than any other country in Europe. If we are able to keep up the tempo in [1362] the next ten years we cannot be adversely compared with any of the European countries. We have schemes which other countries do not have. Some of our schemes are just as good as those in other countries. We have not brought the widows, the old age pensioners and the blind pensioners into this scheme but I hope to have pay-related pensions in the near future.

I agree with those who say that agricultural workers should be included in the scheme. The only reason why they have not been included is that we were unable at present to provide the machinery to collect the contributions and compute the reckonable earnings. The Bill will become operative before contributions commence. The collection of pay-related contributions will not commence before April, 1974, but in order to finance the benefits up to that time I will have to borrow from the Exchequer. Senator O'Brien said it would be 1975 before the scheme became operative. The Senator probably was not present when I was introducing the Bill. In the interim, I will study the possibility of having the contributions collected from the agricultural workers.

I have been asked when the limit of £1,600 will be abolished. I must have regard to the limits laid down by the Minister for Health. The Department of Local Government also use these limits as a guide for giving certain loans. The Department of Education use them in regard to certain educational scholarship grants. Some time ago I asked the different bodies to have their own yardstick for their own schemes so that we can be independent of the £1,600 limit. The abolition of the £1,600 limit will bring in another 30,000 people. However, it will also open the way to a new social welfare scheme in which we will be able to include the self-employed and the unemployed in a contributory scheme where means-tests will no longer apply and where payments will be based on social insurance.

This is the real significance of the Bill before us. It is not perfect. Everybody can mention what is not contained in it and criticise what it contains. It is [1363] a very important beginning to a most important new dimension in social welfare.

The £14 was selected as the floor because the flat rates at present are approximately 40 per cent of £14. What we aim at getting in addition, by way of pay-related benefits, is 40 per cent of amounts over £14. The person earning up to £14 is not suffering under the terms of the Bill. He is getting 40 per cent, the amount at which we aim. Where there are dependants and married people the benefit can be 95 per cent. One of the cardinal principles in all social welfare schemes is that nobody should get 100 per cent of what he earns. There should not be an incentive either to unemployment or sickness.

Many people come to me and say they are paying social insurance for 40 years and never received a penny back. My answer to them is that they are very lucky. Insurance is only an insurance against certain contingencies arising. A man who has not had to call on insurance has never been sick, unemployed or suffered an accident. These are the contingencies against which he is covered. If he is lucky to retire he will get the benefit in his retirement pension, which is also an element to which he contributes.

The worker at present is insured against accidents on the job. He is insured against sickness and unemployment. Insurance covers maternity grants, survivor's death grants, invalidity pensions, wet time and for practically every known contingency. There is also a health element which is not my Department's business, but we collect it for the Department of Health. If a person does not have occasion to benefit from the money he contributes he is a very lucky person in that he has not had to contend with any of the contingencies against which he is insured. When one pays for insurance that does not necessarily mean it should be drawn upon. This is the reason why, when we abolish the limit, we will be able to give greater cover. The people in the higher income bracket have the best records for continuity in employment. The people [1364] who pay most and draw the least amount are the most useful people to the scheme. They will make up for those who are intermittently employed, such as people who work for a few months and draw benefit for the rest of the time. Those people are of no use to the scheme. They are the worst risks.

Most people do not like the waiting period of two weeks. This also applies in Britain. If we abolished this waiting period we would have to readjust our costings on the scheme. If we extend the period of 147 days we would have to adjust our costings again. It is a matter of what we think as equitable. We must decide what amount we should collect for returning in benefits at a particular time.

I should like the House to accept the fact that I am sincere when I say that we will include the agricultural workers as early as possible. In the interim before the scheme becomes operative, we will continue to examine the possibility of collecting their contributions. With regard to female agricultural workers, we are at present studying the equalising of their benefits with those of the male agricultural workers.

I should like to have had all Stages of the Bill today but the Leader of the House has conveyed to me the fact that the Bill is too technical. If we do not get all Stages, we will have to make a slight change in the last section which refers to the Bill being a collective citation of Social Welfare Acts, 1952 to 1972. That would have to be changed to 1973 in that section, and in any other place in which it may occur in the Bill. I do not intend to press for all Stages to be taken.

Professor Dooge: Information on James CI Dooge  Zoom on James CI Dooge  Let us hope that is not the only amendment to which we will all agree. You might get other amendments to which we would agree.

Mr. J. Brennan: Information on John J Brennan  Zoom on John J Brennan  We will not press you. It was nice of the Seanad to meet on Christmas week anyway.

Mr. Reynolds: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  We are not holding up Bills in any way by not taking all Stages.

[1365]Mr. J. Brennan: Information on John J Brennan  Zoom on John J Brennan  Not really. Every speaker pointed out that he welcomed the Bill and then went on to point out what he would like to see in it. I agree that there are many things we would all like to see in it and I hope they will be included as soon as possible.

Question put and agreed to.

An Leas-Chathaoirleach:  Next Stage?

Tomás Ó Maoláin: Information on Thomas Lincoln Mullins  Zoom on Thomas Lincoln Mullins  We shall take the Bill on first sitting day after Christmas. We cannot fix an exact date for it now.

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