Joan Burton (Dublin West, Labour) | Oireachtas source

I thank the committee for the opportunity to present a Supplementary Estimate for the Department of Social Protection. I propose to briefly outline the overall expected financial position of the Department post the budget and the main reasons for the Supplementary Estimate.

I am seeking a Supplementary Estimate of €299 million for 2015. This is necessary for two reasons, first, to part-fund the Christmas bonus costing €198 million for around 1.25 million recipients and, second, to fund payments to pensioners and other recipients normally due on New Year's Day, 1 January 2016, to be paid in 2015 at a cost of €127 million. These two elements, when added together, are greater than the Supplementary Estimate being sought.

Overall expenditure on the Department's schemes, services and administration in 2015 is expected to be €19,894 million. This will be €516 million or 2.7% more than provided for in the original 2015 Revised Estimates. As I mentioned, €198 million is required for the payment of the Christmas bonus, €127 million is required to advance payments due to pensioners on 1 January 2016 to 2015, with the remaining €190 million due to higher expenditure on a number of schemes, as detailed in the Supplementary Estimate briefing template supplied to the committee secretariat.

Income from PRSI receipts during 2015 will result in Social Insurance Fund income in 2015 of an estimated €8,439 million. This will be over €200 million or 2.5% ahead of profile and will be €548 million or 6.9% ahead of the position in 2014.

Before making provision for the Christmas bonus and advance payments to recipients of Social Insurance Fund schemes, the net position of expenditure on the fund is on target when compared to the 2015 Revised Estimate. Approximately €200 million of the Department’s additional spending requirement in 2015 will be required to fund the Christmas bonus and advance pay day to Social Insurance Fund scheme recipients. This additional expenditure will be funded directly or indirectly from the higher PRSI receipts we are now receiving as a result of more people at work.

In this regard, it is worth noting that income from the Social Insurance Fund has increased from €6.7 billion in 2010 to more than €8.4 billion in 2015, an increase of €1.7 billion or 25.8%.

The current account deficit of the Social Insurance Fund peaked at €2.75 billion in 2010 and will have fallen to €180 million in 2015. The 2016 budget Estimate has provided for a surplus of €215 million in 2016, the first such surplus since 2007.

The live register is expected to average around 345,000 in 2015. This is a reduction of 40,000 on the average for 2014 or 100,000 better than the average for 2011. An additional €120.1 million is being sought for jobseeker's allowance in the Supplementary Estimate. However, €15.9 million of this will be offset by an expected underspend on jobseeker's benefit. Some €32.3 million is needed to pay the Christmas bonus and €11.6 million is required to advance the payments due to jobseeker's on 1 January 2016 to an earlier date in December 2015. The remaining additional funding is required for higher recipients due to a higher average live register outturn of 345,000 in 2015 than the average of 337,000 in the 2015 Rev financial allocation.

The 2015 Supplementary Estimate referred by the Dáil and the briefing provided to committee members lists the schemes for which additional sums have been sought as well as some underspends. We can go through the position of the individual schemes as required during this hearing.

To conclude, I hope my opening statement has given members a good overview of the Department's expenditure in 2015 and the reasons underlying the necessity to seek a Supplementary Estimate. The schemes and services operated by the Department benefit everybody in society, either directly or indirectly. The Christmas bonus will be a boost for low income welfare recipients, pensioners, retired people and carers in particular as well as people with a disability but it will also provide a boost to the domestic economy.

I look forward to discussing the Supplementary Estimate of €299 million with the committee.