Mary Hanafin (Dún Laoghaire, Fianna Fail)

——of €124.9 million next year when compensatory measures are taken into account. Of this, €72.7 million is accounted for by changes to the social insurance system.

As Members know, Ireland's social welfare system is based on two quite different types of entitlement, a social insurance system for people who have paid sufficient PRSI contributions and a social assistance system for people without adequate contributions who have little or no household means of their own.

Social insurance is intended both to enable people to insure themselves against adverse life events such as illness or unemployment and to provide for their State pensions and other benefits, through contributions to the national social insurance fund. Social insurance benefits are not means-tested. Instead, entitlement depends on having paid the required number of PRSI contributions relevant to the benefit one wishes to claim.

For the past 11 years, the social insurance fund has been in surplus, with more than sufficient income to the fund to cover the payments being made from it each year, without the State having to provide a subsidy. However, that is changing. As a result of further increases in the live register, expenditure is expected to exceed income to the fund by over €200 million this year and approximately €900 million next year. Although these current deficits can be met from the accumulated surplus, it looks likely that the Exchequer may yet again have to subsidise expenditure from the social insurance fund within a few years. In that context, it is appropriate to look at some of the instances where people with a very limited or distant contribution record have been able to qualify for very significant benefits, regardless of their household income.

Currently, people who have paid just 52 contributions in total can qualify for jobseeker's benefit, illness benefit and health and safety benefit. This means, for example, that migrants or young workers who have only worked here for one year are entitled to claim jobseeker's payments for 12 months, without having to satisfy a means test. This will change from next January, when the number of required paid contributions will be doubled to 104 contributions for new claimants.

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