Regina Doherty (Meath East, Fine Gael) | Oireachtas source

I thank the Chairman and members for the opportunity to put forward the Supplementary Estimate for the Department of Employment Affairs and Social Protection. We are seeking a Supplementary Estimate of €10 million for the 2017 budget in order to fund the Christmas bonus, which is due to be paid to Vote 37 social assistance recipients next week. Overall, the Christmas bonus is estimated to cost €219 million. As Deputies will be aware, we are providing for an 85% bonus this year, the same as last year. The bonus will be paid to approximately 1.2 million customers over the course of next week. It will provide a significant boost for people in the run-up to the festive season and for local economies throughout the country.

The overall cost is broken down into €100 million for Vote 37 recipients and €119 million for Social Insurance Fund recipients. The Social Insurance Fund will fund, in its entirety, the cost of the bonus that is to be paid to people on contributory payments, such as the contributory State pension, invalidity pension and so on. Accordingly, this element of the bonus does not impact in any way on the Supplementary Estimate. As Deputies may be aware, the Social Insurance Fund is in surplus this year. Income from PRSI receipts during 2017 will result in Social Insurance Fund income estimated at €9.86 billion. It will be over €262 million, or 2.7%, ahead of profile for this year and will be €653 million, or 7.1%, ahead of the position in 2016. I imagine Deputies will agree that this is a positive development. Thankfully, it is clear evidence of the significant improvements in employment levels in recent years.

Expenditure on Social Insurance Fund schemes and administration, including payment of the Christmas bonus, is estimated to cost €8.897 billion. This is €86 million, or 1%, ahead of profile. Even with the payment of the Christmas bonus to social insurance schemes, the surplus of the fund is expected to be approximately €1.4 billion at the end of 2017. In so far as is possible, I intend to keep running surpluses in the coming years in light of the need to prepare, on foot of our ageing population, for the rising cost of pensions.

Overall expenditure on the Department's schemes, services and administration in 2017 is expected to be €19.951 billion. This will be €96 million, or 0.5%, more than provided for in the original 2017 Revised Estimate. The higher expenditure is due solely to the payment of the Christmas bonus.

The numbers on the live register are expected to average at approximately 260,300 for 2017. This is a reduction of 43,800 on the average for 2016. The estimated cost of paying the Christmas bonus of €23 million to jobseekers is being offset by underspending elsewhere in the jobseeker's allowance allocation. Consequently, there is no additional allocation required for jobseekers in the Supplementary Estimate.

The briefing provided to Deputies in respect of the Supplementary Estimate lists the schemes for which additional sums are being sought as well as some information on underspending. We can go through the position of individual schemes, if required, during the meeting. In any event, Deputies should note that almost all the expenditure incurred by the Department is demand-led. This demand is driven by demographic trends and economic factors such as developments in the labour market. An estimate of expenditure for any scheme for the following year is published in December as part of the annual Revised Estimates Volume. The individual estimates are constructed on a scheme-by-scheme basis using data on trends in recipient numbers, average payment values and other relevant factors available for that portion of the year in which the Estimate is calculated. Trends can and do change over the course of each year, resulting in expenditure being higher or lower than provided for in the original Estimate. Actual expenditure on most schemes will never be precisely on target as a result of these factors. The extent of any overspend or underspend only becomes fully apparent at the end of the year when the outturn for the year has been confirmed. Thus, for example, we expect an overspend on schemes such as disability allowance and other illness schemes this year. This is primarily due to the continuing increase in the number of applications. In the first half of this year, for example, the number of new applications for disability allowance increased by 8.2% compared with the same period last year. We should assume that the spend in this area will increase.

I hope my opening statement has given Deputies a broad overview of the Department's expenditure in 2017 and the reason underlying the necessity to ask for a Supplementary Estimate of €10 million. I look forward to engaging with committee members presently.