Thursday, 16 December 2021
Social Welfare Bill 2021: Second Stage
I am very pleased to bring this Bill to Seanad Éireann which gives legislative effect to the measures announced on budget day. This is the largest set of social welfare measures announced in 14 years and amounts to some €558 million in additional spending in 2022. Most of the additional expenditure, over two thirds of the total, will go towards protecting core rates of payment for social welfare recipients as committed to in the programme for Government. As such, the provisions of the Bill give effect to across-the-board increases in weekly payments for pensioners, people with disabilities, carers, lone parents and jobseekers. I consider it appropriate that we take this action now to address the additional financial pressure on social welfare recipients. It is important also that we continue to take targeted actions to provide supports for those who are most in need. That is why the Bill also provides for a series of measures that has a focus on carers, lone parents, low-income families and people with disabilities.
As I have stated previously, a priority for me, since I became Minister for Social Protection, has been supporting our carers. Family Carers Ireland estimate that 45,000 existing carers currently on reduced payment rates will benefit from the changes that we are making to the means test. In addition, thousands more who up to now have not qualified for the carer's allowance payment will now be brought into the scheme. The pandemic has been particularly difficult for carers and I am pleased to be the first Minister for Social Protection since the mid-2000s to make changes to the means test.
Last year I increased the carer's support grant to its highest ever level. This year I have reformed the means test and increased the weekly carer's payment. Next year my priority will be to ensure that carers are provided with a pension. I am very appreciative of the positive reaction from colleagues in Dáil Éireann to the measures announced for carers in the budget and look forward to hearing the views of Senators.
As with previous budget day announcements, not all of the measures are included in the Bill. That is because they do not require amendments to primary legislation. One of these measures is the
As a former Minister with responsibility for business, I know that the retail community is still feeling the impact of Covid-19. The past two years have been so difficult for our small and medium-sized businesses. Therefore, I urge everyone to consider spending the Christmas bonus locally this year. I firmly believe that if we make efforts to keep business in towns then we will keep towns in business.
Other measures that do not require an amendment to primary legislation are to be introduced by regulation or on an administrative basis. These include: a provision to reduce the minimum number of contributions required for people aged between 25 and 28 to access the treatment benefit scheme; an increase of €5 per week as well as the uplift in the income threshold for qualification, in the fuel allowance payment, both of which I ensured took effect from budget week; the extension of the hot school meals programme; the equalisation of the back to school clothing and footwear allowance thresholds for one and two-parent households; the extension of access to support grants for jobseekers with disabilities, for example, towards a sign language interpreter, personal reader or workplace adaptation grant; and increasing the rate of the wage subsidy scheme for employers of people with disabilities by €1 per hour, which is the equivalent to 60% of the national minimum wage.
I shall now discuss the sections of the Bill. Section 1 is the commencement provision. Section 2 provides for definitions in the Act. Section 3 takes account of the increase in the minimum wage from €10.20 to €10.50 per hour. It provides for an increase in the reckonable earnings threshold for employees from €398 to €410 whereby employer PRSI contributions are paid at the lower rate of 8.8%. Employers with employees benefitting from the increase in the national minimum wage will continue to attract the lower rate of employer PRSI. It is intended that this section will come into operation on the same day as the national minimum wage increase on 1 January 2022.
Section 4 provides that for the purposes of the Covid-19 employment wage support scheme, the employer PRSI contribution rate of 0.5% will cease on 28 February 2022. The effect will be a reversion to the standard employer social insurance contribution rates of either 8.8% or 11.05%, depending on the income of the employee. Section 5 provides for a €5 increase in the weekly rate of maternity benefit from €245 to €250 from 3 January 2022. Sections 6 and 7 provide for the equivalent increases for adoptive and paternity benefits, respectively.
Section 8 extends the duration for which parent's benefit is payable from five weeks to seven weeks. That is in line with Ireland's commitments under the EU work-life balance directive. This scheme has proved to be very popular, which is reflected in a significant increase in claims this year. I am pleased to be able to extend it by a further two weeks next year to support families with young children.
My colleague, Deputy O'Gorman, the Minister for Children, Equality, Disability, Integration and Youth, will make a corresponding amendment to the associated parent's leave provisions. I understand that this is likely to be done by way of regulation.
Section 9 provides for the rate increase for parent's benefit. Section 10 is to give effect to the increases in the graduated rates of jobseeker's benefit. Jobseeker's benefit rates are graduated according to earnings in the relevant tax year. Section 11 provides that the amount payable for a qualified adult on a graduated jobseeker's benefit claim will increase from €87.20 to €89.30 per week.Section 12 provides for a grant of up to €500 towards the cost of a wig or hairpiece for people suffering from hair loss as a direct result of an illness or treatment for an illness. This is a new measure I am introducing under the treatment benefit scheme and it will be of particular benefit to persons who suffer hair loss as a result of conditions such as alopecia or who are undergoing chemotherapy.
Section 13 will see about 18,000 disability allowance recipients gain up to €5 per week on top of the general increase. That is because this section will provide for an increase in the general weekly means disregard for disability allowance.
Section 14 provides for a €10 increase in the weekly income thresholds of the working family payment for all family sizes. Working families on the scheme will benefit by up to €6 per week. This payment, formerly known as the family income supplement, is a weekly tax-free supplement available to employees with children. It gives additional financial support to people in employment and on low pay.
Section 15 is the first of two provisions that were not announced on budget day. It will provide for periods spent in receipt of the pandemic unemployment payment, PUP, to be counted towards the number of days of continuous unemployment required on a relevant payment to qualify for the back-to-work family dividend. This is a weekly payment to help people with children to move from social welfare into work.
Section 16 is a technical amendment to remove an out-of-date reference to section 238F.
Section 17 contains the other provision that was not announced on budget day. The aim of this section is to provide that the Minister may designate one or more officials to act as a deputy chief appeals officer. That person will be designated to deputise for the chief appeals officer if the latter is not available to perform his or her duties. This should ease the administrative burden on the chief appeals officer and will, I hope, help speed up the social welfare appeals process and improve turnaround times, something I know Senators will welcome.
Section 18 gives effect to increases in the qualified child payment and the living alone allowance for claimants in receipt of social insurance benefits. For most social insurance and assistance payments, an increase is paid for dependent children. The €3 increase for qualified child dependants aged 12 and over from €45 to €48 per week recognises the additional expenditure required during the teenage years. The payment in respect of qualified children under 12 will increase by €2, from €38 to €40 per week, continuing the policy of recent years that has been informed by research on the minimum essential standard of living conducted by the Vincentian Partnership for Social Justice.
The living alone increase is an extra payment for people on certain social welfare payments who live alone. The Bill will provide for an increase of €3 per week, from €19 to €22. Taken together with the €5 per week increase in last year's budget, this represents a substantial increase of 57% in the living alone allowance since the Government came into office.
Section 19 will provide for increases in the weekly rates of social insurance payments. Section 20 allows for a significant expansion in the list of agri-environmental schemes attracting the specific means disregard applicable to farm assist, jobseeker's allowance and the non-contributory State pension. These schemes attract a disregard of €2,540, with the remaining balance over that amount assessed at 50%. This provision will support Ireland's climate action agenda by removing a potential barrier for low-income farmers to participating in agri-environmental schemes.
Section 21 will provide for an increase of €30,000 in the exempted capital value when calculating means for the carer's allowance. Assessment of capital is part of the means test along with an assessment of income. Capital includes savings, investments and property, other than the family home or principal private residence. This section will provide for an increase from €20,000 to €50,000 in the exempted capital value when calculating means for the carer's allowance. This increase will allow carers who have accumulated savings to retain their investment without it impacting on their carer's payment. Together with the increase in the weekly earnings disregard, thousands of carers will gain from these significant improvements. These increases will benefit recipients who are currently on reduced payments and will broaden the net and bring in new applicants to the scheme.
Section 22 will provide for increases for qualified children and the living alone allowance for recipients on means-tested payments. This is a mirror of the provisions set out in section 18 in respect of payments based on social insurance contributions. The increase in the living alone allowance by €3 to €22 will benefit 230,000 pensioners and people with disabilities, while the uplift in increases for qualified children will be received by 372,000 beneficiaries.
Section 23 will provide for increases in the rates of social assistance payments, including a €5 per week increase in the maximum personal rate. This is equivalent to provisions set out in section 19 in respect of payments based on social insurance contributions and is intended to address commitments in the programme for Government to protecting core social welfare rates of payment.
Section 24 will provide for an amendment to the end date of the Covid credit guarantee scheme. I agreed with the Tánaiste to carry this provision in this Bill. The Government approved the €2 billion Covid credit guarantee scheme in 2020 as one of the main supports for Covid-impacted businesses. The scheme was due to end on 31 December 2021. It is now intended this scheme will be extended until the end of June 2022. However, this legislation allows it to be extended to 31 December 2022, in case the more relaxed state aid rules are extended beyond the end of June.