Joe O'Brien (Dublin Fingal, Green Party) | Oireachtas source

It is a pleasure to be able to bring this Bill before Seanad Éireann. The main purpose of the Bill is to give legislative effect to several of the very substantial improvements in social protection that were announced on budget day. In addition, this year, we are introducing a set of provisions to implement the biggest ever structural reform of the State pension system, which has been agreed by the Government in response to the recommendations of the Pensions Commission.

We all agree that at the heart of our social protection system, and any worthwhile social protection system, is ensuring that the most vulnerable are cared for adequately and are able to participate in our society in a meaningful way. That is why I take great encouragement from the assessment of this budget by the Parliamentary Budget Office, which stated:

... tax and welfare measures in Budget 2024 are very progressive from a distributional impact perspective, with lower income households gaining more proportionately than middle and upper-income households. The increase in core welfare rates and qualified child increases are key drivers of this.

As well as continuing with significant increases in basic rates of social welfare payments, we have once again secured a comprehensive set of one-off payments, including the Christmas bonus, which is being paid this week to over 1.3 million recipients. There will be another double payment for those recipients in January 2024 as well as one-off payments for recipients of working family payment, disability and carers' payments, living alone allowance, fuel allowance and child benefit and those in receipt of an increase for qualified children. These measures do not require primary legislation and are therefore not included in the Bill. All this amounts to the biggest ever social protection budget package in the history of the State, with almost €1.3 billion committed in a full year annually for ongoing supports and over €1.2 billion allocated for one-off payments.

The pensions reforms in the Bill give legislative effect to the Government's response to the recommendations of the Pensions Commission. They include that long-term carers are provided with contributions for gaps in their social insurance records.This will help to ensure thousands of people, mainly women, who have spent time caring for loved ones for more than 20 years will now be able to qualify for the State contributory pension. The introduction of this entitlement rightly reflects the important contribution of these carers to their families and society.

The pension reforms also include provisions that allow people who want to work longer to defer their pension and receive a higher rate of payment by doing so. This is just a voluntary deferment and pensionable age remains at 66. The measure will be particularly useful for people who reach pension age and find they are short the required number of contributions. These people will have the option to work for an extra year or two to enhance their PRSI contribution record and qualify for a higher pension payment.

Also included in the pension reforms are provisions for a transition to the total contributions approach to calculating pension entitlements, which will be implemented on a phased basis over a period of ten years. This approach means a fairer and more transparent system whereby a person's lifetime contributions will be more closely reflected in the benefit they can expect to receive.

There are 53 sections in the Bill, which I will now describe for the House.

Section 1 provides for the Short Title and commencement provisions.

Section 2 provides for definitions of relevant Acts.

Section 3 is a provision to allow employers to collect PRSI contributions on any gain arising from employee share options. Currently, both the tax and PRSI returns are made on a self-assessment basis by the employee.

Sections 4, 5 and 6 provide for a €12 increase in the weekly rate of maternity benefit, adoptive benefit and paternity benefit, from €262 to €274, from 2 January 2023.

Section 7 provides for the extension of the parent's benefit from seven weeks to nine weeks from August 2024. This means both parents can take up to nine weeks' paid leave each in the first two years of a child's life.

Section 8 provides for a €12 increase in the weekly rate of parent's benefit, from €262 to €274, from 2 January 2024.

Section 9 is to give effect to the increases in the graduated rates of jobseeker's benefit and jobseeker's benefit for the self-employed.

Section 10 is a technical amendment. It requires the substitution of "illness benefit" for "disability benefit", which is the current name for the scheme.

Section 11 provides clarity that jobseeker's assistance is paid on the basis of a six-day week.

Section 12 is a technical amendment to correct incorrect textual references.

Section 13 provides for an extension of the child benefit to 18-year-olds in full-time education from September 2024. With many children now starting primary school at age five and an increase in pupils doing transition year, there has been an increase in the number of 18-year-olds still in secondary education. Many here would prefer if the measure could be implemented from the start of the calendar year. Nevertheless, it is important to remember it represents a long-term change for the better and will support families into the future.

Section 14 provides for a €54 increase in the weekly income thresholds for the working family payment for all family sizes, ensuring more families can qualify for this important payment.

Section 15 makes changes regarding the credit union personal microcredit loan, known as the "It Makes Sense" loan. This includes allowing for the maximum amount of the loan to be increased from €2,000 to €5,000.

Section 16 is a technical amendment to replace references to "old age (contributory) pension" with "State pension (contributory)", which is the current name of the scheme.

Section 17 and Schedule 1 provide for increases in the rates of social insurance payments, including a €12 per week increase in the personal rate of benefit. They also provide for an increase in regard to qualified adults and qualified children, where relevant.

Section 18 is a technical amendment to correct a reference in the supplementary welfare allowance provisions.

Section 19 and Schedule 2 provide for increases in the rates of means-tested payments, including a €12 per week increase in the personal rate, as well as increases for qualified adults and children.

Section 20 provides for an increase in the monthly rate of payment of the domiciliary care allowance, from €330 to €340, from 1 January 2024.

Part 3 concerns the interaction between statutory sick pay legislation and social welfare legislation. The main purpose of these amendments is to ensure illness benefit and injury benefit are not paid on days for which statutory sick pay is paid by a person's employer and to make arrangements for payment of statutory sick pay where an absence spans the end of a year.

Section 21 means a person would not be able to avail of two separate periods of statutory sick leave for a single absence from work due to illness that spans the year end.

Section 22 is a technical amendment to correct a referencing error in the Workplace Relations Act 2015.

Section 23 inserts definitions regarding statutory sick pay into the Social Welfare Consolidation Act.

Section 24 provides that a customer entitled to statutory sick pay from their employer cannot have a concurrent entitlement to the illness benefit.

Section 25 allows people with a reduced PRSI contribution record to be paid the illness benefit for a period of 312 days, including days in receipt of statutory sick pay.

Section 26 amends the current legislation to ensure long-standing illness benefit recipients who have an entitlement to statutory sick pay from their employer cannot have a concurrent entitlement to illness benefit.

Sections 27 and 28 mirror the illness benefit provisions regarding occupational injury benefit, OIB. OIB is a scheme for people injured by an accident at work or who contract a disease related to work. As with the illness benefit, an employee is not entitled to be paid statutory sick pay and OIB at the same time.

Part 4 carries a number of provisions to give effect to important State pension reforms that I referred to. These relate to enhanced pension provision for long-term carers, the introduction of a voluntary system of pension deferral, and the phased transition to a total contributions approach for qualifying for a contributory State pension. There are also consequential changes to PRSI provisions.

Sections 29 to 34, inclusive, relate to the changes required to social insurance contributions in light of the introduction of the option to defer drawing down the contributory State pension. Currently, a person's liability for PRSI ceases on reaching 66. However, for those who turn 66 from January 2024 and choose to defer drawing down their contributory State pension, the social insurance rules need to accommodate a later date for this liability to cease. This will be the date the person is awarded their contributory State pension or when they reach the age of 70, whichever comes first.

Section 30 changes the criteria relevant to becoming an employed contributor for the purposes of the Act. This now extends the criteria past age 66 until a person is awarded the contributory State pension or reaches 70, whichever comes first.

Section 31 relates to the payment of employee contributions on the exercise of employee share options. Again, this provision extends the criteria past age 66 until a person is awarded the contributory State pension or reaches 70, whichever comes first.

Section 32 relates to the criteria relevant to becoming a self-employed contributor for the purposes of the Act. Again, this provision extends the criteria past age 66 until a person is awarded the contributory State pension or reaches 70, whichever comes first.

Section 33 relates to the criteria relevant to becoming a voluntary contributor for the purposes of the Act. This amendment extends the criteria for becoming a voluntary contributor to those over 66 until they are awarded the contributory State pension or reach 70, whichever comes first.

Section 34 amends section 25 of the Act and is connected to the previous amendment for voluntary contributors and provides for a similar extension to those over 66.

Sections 35 to 43, inclusive, relate to the changes required to certain social welfare benefits in light of the introduction of the option to defer drawing down the contributory State pension. Currently, a person's entitlement to most social welfare benefits ceases on reaching age 66 and they become eligible for a State pension. However, for those who turn 66 in January 2024 and choose to defer drawing their contributory State pension, the provisions relating to some of these benefits need to change to accommodate access to support for short-term contingencies, such as illness or job loss. For those who reach 66 in January 2024, instead of the benefits ceasing at age 66, these benefits will cease at the date on which the person is awarded their contributory State pension or reaches 70, whichever comes first. As there may be people in receipt of one of these social welfare benefits when they turn 66, they will be given an option to remain on that payment if their intention is to choose to defer their contributory State pension, provided they make an application to do so.

Section 35 relates to eligibility for the illness benefit and provides that instead of the benefit ceasing at age 66, eligibility will cease on the date the person is awarded their contributory State pension or reaches 70, whichever comes first.

Section 36 allows a person in receipt of the illness benefit on reaching 65 to apply to remain on the benefit.

Section 37 relates to eligibility for the partial capacity benefit. As with the change to illness benefit, this provides that instead of the benefit ceasing at age 66, eligibility will cease on the date the person is awarded their contributory State pension or reaches 70, whichever comes first.

Section 38 provides that if people on the partial capacity benefit are approaching their 66th birthday, they must apply to remain in receipt of it. The position on the illness benefit is similar.

Section 39 relates to the eligibility for the jobseeker's benefit and provides that, instead of the benefit ceasing at age 66, eligibility will cease on the date the person is awarded their contributory State pension or reaches 70, whichever comes first.

Section 40 is a technical amendment to allow the jobseeker's benefit to be claimed up to 70 years of age.

Section 41 provides that, as with the illness and partial capacity benefits, a person must, if they choose to do so, apply to remain on the payment on reaching age 66.

Sections 42 and 43 relate to eligibility for jobseeker's benefit for the self-employed and mirror the same changes made to jobseeker's benefit.

Section 44 amends section 108 of the Act to provide for the expansion of the eligibility criteria for the contributory State pension to now include those up to the age of 70. The provision also provides for an entitlement to a higher rate of pension at the relevant age of claiming, whether it is 67, 68, 69 or 70.Section 45 provides for attributing contributions to long-term carers who have been caring for an incapacitated person for more than 20 years. This is achieved by attributing the equivalent of paid contributions to these long-term carers to cover gaps in their contribution record for the purposes of the contributory pension. The section outlines the criteria to be met to qualify for long-term carer’s contributions. These criteria are based on the existing caring requirements on other schemes such as carer’s allowance and carer’s benefit. The section provides for the contributions to be attributed to those who reach the age of 66 in January but also those who are already past the age of 66. We launched a system for registering for these long-term caring contributions in September. Members may also have heard the advertisements on the radio. I encourage anyone who is or has been a long-term carer to register these periods through mywelfare.ie.

Section 46 enables long-term carer’s contributions to be considered as qualifying contributions towards the contributory pension. The section also amends the qualifying conditions to take into account contributions after the age of 66 when calculating the contributory pension. Section 46(1)(b) provides for managing the situation where a person may be in receipt of a payment from the Department after age 66 while seeking to avail of a higher rate of pension at a future date. The duration that the person is in receipt of one of the relevant payments in Schedule 5A will reduce the age at claim for any higher rate of pension by an equivalent period. This section also sets out the substantive and consequential changes required to the Act to provide for the ten-year phased transition to the total contributions approach, or the aggregate contributions approach as it is called in the Act. The Commission on Pensions recommended the full transition to a total contributions approach only and the abolition of the yearly average approach to be implemented as soon as possible with a transition period of ten years. This will eliminate the anomalies inherent in the current yearly average system, for example where a person joins the social insurance scheme at 55 and gets a full pension versus a person who has worked on and off for 39 years since school and may only get a 90% pension. During the ten-year transition period, a person’s pension will be calculated using two methods and the person will be granted a pension using the higher of these two calculations. The section also makes a consequential amendment to regulations that can be made for long-term care-giving qualifying contributions as they apply to those with modified social insurance contributions.

Section 47 takes into account that a self-employed contributor may defer claiming their pension until attaining the age of 70.

Section 48 amends section 111 of the Act, which relates to the rate of contributory State pension payable. There will be five rates of payment for State pension, depending on the age a person is when he or she draws down the pension. These rates will be set out in the budget annually and based on actuarial factors, which will be reviewed every five years in line with the actuarial review of the Social Insurance Fund. Where the actuarial factors change based on any future review, a lead-in time to notify future pensioners will be provided. They will give approximate rates based on the January 2024 rate of the contributory State pension of €277.30 as follows: €290.30 at age 67; €304.80 at age 68; €320.30 at age 69; and €337.20 at age 70. The increase for a qualified adult at each stage will also be adjusted. Once a person claims his or her pension, he or she will remain on that rate for life, subject to any budget changes. A person’s rate of payment will be the same regardless of whether he or she claims the pension from his or her birthday - for example, at the age of 67 years - or at any time prior to his or her next birthday.

Section 49 removes any ambiguity that an individual who automatically transfers from invalidity pension to the State contributory pension on reaching the age of 66 will receive the age-referenced rate for the age of 66 years as is the current practice.

Sections 50 and 51 relate to eligibility for, and duration of, the back to work family dividend. These provisions mirror the equivalent amendments to the illness benefit, partial capacity benefit and jobseeker's benefit set out in sections 35 to 41.

Section 52 provides for the insertion of rates of the State contributory pension for ages 66, 67, 68, 69 and 70 into Schedule 2.

Section 53 provides for the insertion of a new Schedule 5A into the Act, setting out the specified weekly payments that will reduce the rate of deferred pension if incurred over the age of 66.

I believe the provisions of this Bill and other measures announced on budget day will continue to provide much-needed financial assistance to those who are struggling to make ends meet. It also lays the foundation for a more sustainable pensions system, where we can continue to maintain the pension age at age 66. Providing long-term carers with entitlement to a contributory State pension has been a key priority of this Government and I am glad now to be involved in delivering on that commitment.

The 101st year since the foundation of our State is drawing to a close. The measures in this Bill reflect the values of a modern State, namely, compassion and concern for people who need it most. The budget measures are targeted at the vulnerable. The long-term carers contribution is an ambitious step-change by this Government on behalf of carers. It acknowledges the self-sacrifice made by family carers. I look forward to hearing the contributions from Senators on the Bill. With that, a Chathaoirleach, I commend the Bill to the House.