Wednesday, 29 July 2020
Social Welfare (Covid-19) (Amendment) Bill 2020: Second Stage
I am pleased to be in the Seanad to discuss this important legislation. The Government is absolutely committed to supporting people who have lost their jobs due to Covid-19, which is why we have extended the pandemic unemployment payment, PUP, to next April. As the payment will now be continued for a much longer period than the 12-week period that had originally been envisaged, it is important that it be put on a statutory footing, which is what the Bill will do.
I would like to take this opportunity to address some of the concerns that have been raised in recent days. The pandemic unemployment payment was introduced to support people who had lost their jobs overnight as a result of Covid-19. It was a solidarity payment to protect people's incomes at a time of national crisis. I strongly believe that anyone who breached that solidarity by claiming a payment he or she was not entitled to because he or she was no longer living in this country should have that payment stopped. Of the 2,500 PUP claims that have been stopped since March, the vast majority - well over 90% - relate to people who were permanently leaving the country. I have listened to the concerns expressed in recent days about people whose payments were stopped because they were travelling abroad on holiday. There are a small number of cases where people may have travelled abroad and were genuinely not aware of the travel guidance or the criteria that applied to the PUP. I accept that my Department could have communicated more effectively on this issue and, therefore, I have directed my Department to review all cases to date where people went on holiday and had their payments stopped.
Since the regulations relating to jobseekers were signed on 10 July, the Government's travel advice has changed, with the publication of the green list last week. On that basis and in line with the Government's travel advice, I have asked my officials to amend the regulations so that jobseekers who wish to travel to any of the countries on the green list can do so and continue to receive their payment. Once the legislation before us is enacted, I also intend to make similar regulations in respect of those receiving the PUP. For countries that are not on the green list, persons can travel for essential reasons only.So, for example, if someone is going to a non-green list country, it must be for essential reasons such as a bereavement or health issues. If the person's Intreo office is informed in advance, the payment will not be impacted and approval will be given.
The pandemic unemployment payment was established on an emergency, ad hocbasis and is currently paid out as an exceptional needs payment under the same provisions that apply to the supplementary welfare allowance. As matters stand, under section 249 of the Social Welfare Act, people cannot be absent from the State and receive a supplementary welfare allowance payment. As I have just explained, however, the legislation before the House will, if passed, enable me, as Minister, to introduce regulations to allow people on the PUP to travel to green list countries. This will mean persons on the PUP can travel to green list countries and their payment will not be impacted. As is the case with jobseekers, persons travelling to countries outside the green list can do so only for essential reasons. The Government is committed to supporting people who have lost their jobs due to Covid-19, which is why we have extended the pandemic unemployment payment to next April. We will continue to keep all regulations relating to the payment under review in line with the Government's travel and public health advice.
The Bill is, in many ways, fairly straightforward legislation that has two interrelated key purposes. As I have said, it will place the pandemic unemployment payment on a solid, statutory basis within the framework of the Social Welfare Consolidation Act 2005 and provide that employees who have been directly affected by the Covid-19 pandemic will have their social insurance records protected.
The House will recall that when the economy had to be largely shut in mid-March, my Department responded to this unprecedented emergency by introducing the pandemic unemployment payment. To enable this payment to be made quickly and regularly to a huge number of people and households, my Department relied on section 202 of the Social Welfare Consolidation Act as the legal basis for this emergency payment. Essentially, the pandemic unemployment payment was made as an urgent payment under the legislation governing the supplementary welfare allowance scheme. While this was appropriate at the time because it was an urgent response, the extension of the period for which the pandemic unemployment payment will be made means it is now appropriate to place it on a discrete statutory footing. Doing so will mean we can make arrangements to attribute full social insurance contributions to recipients of the payment.
I want to take this opportunity to express my thanks to the staff of the Department for the extraordinary efforts they put in, most especially in those earliest weeks, to ensure that 1.2 million weekly income support payments were processed. In total, about 800,000 individuals have received at least one payment under the pandemic unemployment scheme, with the total number in payment at any one time peaking at just over 600,000. While a great deal of work continues to be done, it is right that we acknowledge the outstanding public service delivered at that particularly difficult time.
The House will know that, with the announcement of the July stimulus package last Thursday, we will be introducing some further changes to the Covid-19 pandemic unemployment payment with effect from 17 September. These changes will be introduced by way of regulation under the Bill and I will refer to them when I am going through its various sections. A primary purpose of the Bill is to ensure we have the necessary legislative backing for a measure that offers support to those employees who would, were it not for Covid- 19, in the ordinary course, have expected to continue in employment and to sustain and enhance their social insurance contribution records. The Bill will allow my Department to attribute these employees with paid PRSI contributions. This will ensure they will maintain their entitlements to short-term payments, as well as enhancing their PRSI records for long-term entitlements such as at the contributory State pension. I would like to take the House through the various provisions of the Bill now. Sections 1 to 3, inclusive, provide for the standard provisions as to the Short Title and construction of the Bill, and the commencement provisions and definitions used in the Bill. While the establishment of the Covid-19 pandemic unemployment payment, PUP, will take effect on enactment, section 2 provides that PRSI contributions may be attributed back to 13 March when the economy was paused.
Section 4 provides for the insertion of new definitions into the Social Welfare Consolidation Act 2005 arising from this Bill.
Section 5 is another standard provision which extends the list of regulatory powers which require the formal consent of the Minister for Public Expenditure and Reform. Any regulations made under this Bill will require the consent and signature of the Minister for Public Expenditure and Reform.
Section 6 amends section 7 of the Social Welfare Consolidation Act, which identifies that expenditure should be charged to the Social Insurance Fund. This section simply provides that my Department will work with the Department of Public Expenditure and Reform to determine how much of the PUP expenditure incurred to date should now be properly charged to the Social Insurance Fund, given that many people in receipt of PUP had an underlying entitlement to jobseeker's benefit.
Any expenditure on the Covid-19 PUP benefit will, following enactment of this legislation, automatically be charged to the Social Insurance Fund. This is an accounting mechanism and does not have any impact on the entitlements of claimants.
Section 7 is another technical amendment which is required to confirm that a self-employed contributor is entitled to claim the Covid-19 pandemic unemployment payment.
Section 8 inserts a new Chapter 6A into the Social Welfare Consolidation Act specifically to address a key objective of the Bill - the attribution of paid social insurance contributions. This new chapter defines the cohorts to whom contributions may be attributed. These will be predominantly those in receipt of the pandemic unemployment payment, jobseeker's benefit, jobseeker's allowance as well as those on the temporary wage subsidy scheme, TWSS, who have lost their employment since 13 March 2020 as a result of the public health crisis arising from Covid-19.
The new chapter also formally provides that employers and employees who have availed of the TWSS are exempted from the requirement to make the social insurance contributions which apply generally to all employed contributors and their employers. It also formalises the arrangements whereby employers availing of the TWSS are required to pay a notional 0.5% rate of PRSI in respect of any top-up payments to the employee. The amount of the subsidy paid to the employee is exempted from PRSI. The new chapter also clarifies that the contribution will be attributed at the same rate as that previously paid. Put simply, if the employee was paying Class A social insurance contributions before losing that employment as a result of Covid-19, then the attributed contribution will also be a Class A contribution. For the avoidance of doubt, a provision is included to confirm that information may be exchanged between this Department and the Revenue Commissioners to ensure that employees benefiting from the TWSS can be identified and have paid contributions attributed to them.
Section 9 is a technical amendment which formally identifies the new Covid-19 PUP as a social insurance benefit within the social welfare code.
Section 10 is a technical amendment to reflect the fact that section 2 of the Social Welfare Consolidation Act 2005 will now include a definition of "Covid-19" and it avoids repetition of that definition elsewhere in the Act.
Section 11 inserts a new chapter 12B into the Social Welfare Consolidation Act 2005 to provide for the establishment of the Covid-19 pandemic unemployment payment scheme in its own right. Within this new chapter, the new section 68L confirms the existing general conditions of eligibility for Covid-19 PUP while the new section 68M confirms the PRSI contribution conditions. The new section 68N provides for the duration of the payment to be set by regulation. Following the launch of the stimulus package last week, I will be introducing regulations in September to specify that new applications for the payment will be accepted until 17 September.
The new section 680 provides that the weekly rates of Covid-19 pandemic unemployment payment are set out in Part 6 of Schedule 2 to the Social Welfare Consolidation Act 2005.Again, in line with the stimulus package, I will be providing for revised rates by way of regulations in September.
The new section 68P sets out the arrangements which apply when regulations are being introduced in respect of the Covid-19 PUP.
Section 12 is a technical amendment to allow for regulations on late claims to be introduced.
Section 13 amends Schedule 2 to the Social Welfare Consolidation Act 2005 by introducing a new Part 6 to that Schedule, specifying the rates of Covid-19 PUP. These are the rates which apply currently, and as I said, I will be introducing regulations to provide the revised rates in September.
In summary, and against a background where so much of our legislation has necessarily been concerned with the more negative aspects of the pandemic, the Bill before us today is here for positive reasons. We are putting the pandemic unemployment payment on a statutory footing which will allow for the Minister or an Accounting Officer to be properly accountable to the Oireachtas and its committees in respect of the scheme. We are protecting the position of employees who have lost their employment because of the Covid-19 measures in terms of their entitlement to social insurance benefits. I would also like to put on the record that this legislation does not interfere with an employee's right to seek redundancy.
I commend the Bill to the House.