Dáil Éireann - Volume 483 - 26 November, 1997 - Other Questions.


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Dáil Éireann - Volume 483 - 26 November, 1997

Other Questions. - Social Insurance Fund.

Mr. Bell Mr. Bell

21. Mr. Bell asked the Minister for Social, Community and Family Affairs the reason there has been a reduction in the Estimates in the social insurance fund from £12 million to £6.3 million; and if he will make a statement on this reduction. [20796/97]

Mr. D. Ahern Mr. D. Ahern

Mr. D. Ahern: Subhead B of my Department's Estimates provides for the Exchequer subvention to the social insurance fund. The subvention is the amount by which expenditure from the fund is greater than its income. The fund expenditure and income estimates underlying the 1998 Estimate — Abridged Version — and the forecast outturn for 1997 are contained in a tabular statement which I will circulate in the Official Report.

The reduction of £5.7m in the subvention in 1998 is due to the expectation that fund income will increase by slightly more than fund liabilities, on a pre-budget basis. Income, which is made up almost entirely of PRSI contributions, is expected to increase by £94.9 million, due mainly to increased employment and higher earnings. The liabilities of the fund are expected to increase by £89.2 million, due mainly to the full year costs of the 1997 budget improvements and to a projected increase in numbers of recipients on some schemes, mainly contributory pensions.

875

[875]

876

[876]

Subhead	1997 Forecast Outturn	1998 Estimate	Change 1997 over 1998
	£000	£000	%
Sickness Benefit	178,400	188,700	6
Disability Pension	200,700	204,600	2
Maternity Benefit	34,600	41,800	21
Health and Safety Benefit	140	200	43
Adoptive Benefit	100	100	–
Treatment Benefit	28,200	30,300	7
Old Age (Contributory) Pension	327,000	335,400	3
Retirement Pension	338,800	358,100	6
Unemployment Benefit	212,800	217,700	2
Widow(er)s/Orphans	379,800	401,000	6
Deserted Wife's Benefit	74,700	70,900	-5
Death Grant	1,000	1,000
Occupational Injuries	47,800	50,600	6
Redundancy and Insolvency Payments	16,000	16,300	2
Equal Treatment	7,000	2,000	-71
Total Benefits	1,847,040	1,918,700	4
Administration	95,160	102,800	8
(A) Total Expenditure	1,942,200	2,021,500	4
Income
Income from PRSI Contributions	1,920,000	2,015,000	5
Investments	250	100	-60
Rent	15	15
Reciprocal Arrangements	85	85
(B) Total Income	1,920,350	2,015,200	5
Excess of Expenditure over Income (A-B)	21,850	6,300	-71
Deduct:— Opening Overdraw	9,850	0	100
Subhead B	12,000	6,300	-48

Mr. Bell Mr. Bell

Mr. Bell: Will the reduction of £5.7 million interfere with the administration of this important scheme? Will the Minister indicate where that £5.5 million will be transferred? Will it be used for the benefit of the people who made contributions to the fund or will it be used under some other heading?

Mr. D. Ahern Mr. D. Ahern

Mr. D. Ahern: There has been a sizeable increase in contributions to the fund in recent years, and again this year the amount is ahead of target. The issue of how this matter will be addressed will be subject to negotiations between the Minister for Finance and myself. No services are being cut. The reduction in the subhead is primarily due to the increase in PRSI income, which is obvious from the Estimates. PRSI rates have been reduced considerably in recent years and that was taken into account.

Proinsias De Rossa Proinsias De Rossa

Proinsias De Rossa: Will the Minister clarify we are not talking about a cut in the PRSI fund but about a reduction in the Government subvention to the fund? We are talking about the make-up of the difference between income and expenditure, and because the income is greater than expected the subvention is reduced. Does the Minister foresee in the coming year that PRSI income will exceed expenditure and, if so, in what way will the excess money be used?

Mr. D. Ahern Mr. D. Ahern

Mr. D. Ahern: The indications are there will be little difference between income and expenditure, but I would be loath to speculate until I see the ultimate figures. If there is a surplus, the Government will decide how it is spent. The matter will be primarily a source of negotiation between the Minister for Finance and myself.

Proinsias De Rossa Proinsias De Rossa

Proinsias De Rossa: The use of the surplus is prescribed by law under social insurance fund legislation. Will the Minister indicate that, given the increasing demands on the fund for pensions and so on in future years, the money will not be used other than for social insurance fund purposes? Will he agree it is important we maintain the tripartite support for social insurance, that is, employers' and employees' contributions and Government subvention, a system which guarantees benefits to the people who pay into the fund?

Mr. D. Ahern Mr. D. Ahern

877

Mr. D. Ahern: I accept fully what the Deputy has said. The actuarial review instigated by him when Minister, which I recently launched, contains very interesting information on our liability [877] as a nation over the next 60 years in terms of pensions. It would be a retrograde step if that was jeopardised by targeting the social insurance fund and I will ensure that does not happen.

Dáil Éireann 483 Other Questions. Social Insurance Fund.

Questions

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