Seanad Éireann - Volume 106 - 19 December, 1984

Social Welfare (Amendment) Bill, 1984: Committee and Final Stages.

Section 1 agreed to.


Question proposed: “That section 2 stand part of the Bill.”

Mr. Fallon: Will the Minister of State confirm that if a person is found suitable to work, say, five days in one week and has no work the following week, in other words he is working for the full five days in two weeks, that will be sufficient for [1040] him to qualify? Can he do it in that manner? There seems to be some little confusion on that. It has been suggested that this could happen. I would like clarification on that.

Minister of State at the Department of Social Welfare (Mr. Pattison): It is envisaged that arrangements can be inserted in the scheme to provide for its operation if it suits the job being done, by five days' work in one week and then a week off.

Mr. Fallon: A week on and a week off.

Mr. Pattison: Week on, week off. Of course it would be understood that in the week off the participants in the scheme could not claim unemployment assistance. They would get credits.

Mr. Fallon: Credits?

Mr. Pattison: Yes. Section 2 inserts a new section in section 35 of the Consolidation Act, 1981 which deals generally with disqualification for unemployment benefits and it provides that persons participating in the social employment scheme will be disqualified from receiving unemployment benefit during the period of their participation. This is necessary because some participants could, by virtue of getting class A employment for the balance of the week, succeed in qualifying or re-qualifying for unemployment benefit. For example, a participant who exhausted his 390 days' unemployment benefit subsequently and received long term unemployment assistance could, under existing arrangements, if he obtained other employment, re-qualify for unemployment benefit after 13 weeks of class A employment. The reason for the disqualification of the social employment scheme participants is that £70 wages under the scheme are being paid in lieu of unemployment assistance that would normally be paid in respect of a full week, and the scheme is being funded on that basis. It would be contrary to the objective of the scheme if participants [1041] became eligible for unemployment benefit during the course of the scheme.

Mr. Ferris: I have one further question arising out of the week on, week off arrangement where a participant can work a full week and then work no hours in the second week. In the event of that person not having insurable employment alternatively in the week after I want to clarify that he will have two weeks credits in a week.

Mr. Pattison: That is correct.

Mrs. Honan: Yesterday I found myself in the unfortunate position of being in the Chair when I should have been here on the floor.

Mr. Ferris: The Senator can arrange that any time she likes.

Mrs. Honan: No, I say to Senator Ferris. I see more problems here than we have already in the control of these schemes and this type of unemployment benefit. The Minister has cleared a point for me. He has said that under section 2 people will be disqualified from receiving unemployment benefit. In the other House last week, whatever went on there, and maybe more responsibly here yesterday and today, are we not giving the impression that there will be £70 per week for part-time work? I had taken it that this £70 was for part-time work and that it did not disqualify persons from unemployment assistance but yesterday the Minister made an extraordinary statement in reply to a question as to the amount of money that a person might receive, that the sky was the limit. I wish I knew the Ireland he was talking about. It is not the one we are living in today. The Minister was referring to the amount one might earn after getting the £70. I thought that this disqualifies persons from unemployment assistance. Am I wrong in assuming that it does disqualify them?

Mr. Pattison: The Senator is mixing up two different items. Without this section [1042] it is possible for people on unemployment assistance to opt for a scheme of this kind and in addition to get employment for the other two and a half days or the other five days, if they are on a five day alternate weeks and after 13 weeks of getting paid contributions from the other employment, to requalify for unemployment benefit. The House will see the necessity for this section. It is to prevent that happening.

It should be borne in mind that this is a scheme that will be available to people who have been unemployed for 12 months so that therefore they will be on unemployment assistance. If this section were not included, people could use the scheme as a means of requalifying and then going back on unemployment benefit after 13 weeks. That would defeat the purpose of the whole scheme. The main point to bear in mind is that people participating in the scheme are credited with contributions in the same way as they are credited when claiming unemployment assistance or benefit or sickness benefit. It takes 13 paid contributions to get back in to unemployment benefit. The scheme will substitute for unemployment assistance and the credited contributions must be of the same value as the credited contributions he would get if he were signing for benefit or assistance. The credits maintain one's record for future entitlements. There is no other difference in the scheme of credits.

Mr. Cregan: I presume the priority in the case of this Bill is to put as many young people to work. The Minister is not denying that there could be a situation within local authorities in which participants in the scheme could work a five day week. We were assured yesterday that there would be no danger of anybody taking over from the full-time employee of a local authority or of any other such body but the impression is being given now that if a person works a five day week one week, he will not have to work at all the next week. I do not see any reason for not saying that the priority should be work and not the consideration of the person who is doing the work. I [1043] say that with respect. What I mean is that it would not be fair to give work for five days a week every second week to one person and not to give any work to another person. There is no reason for our not stipulating two two-and-a-half day's work. We would then have more people working. We must not give an impression to the general public that a person may work a five day week one week and do as he wishes the following week because he will be credited anyway. He will not get unemployment assistance for that following week. We are creating a situation in which people can be dragged into the black economy and that is very dangerous. If a person works a full week he will not be entitled to unemployment assistance the next week but he gets two £70—£70 for each of the two weeks. If I am wrong in that, I should like to be corrected. In no circumstances must we create a situation in which the person is to be idle all the next week and still be entitled legally to wander where he likes. We are admitting that he may earn as much as he wishes in the week in which he is not unemployed.

Mr. Fallon: I support the views of Senator Cregan. I would prefer a situation where the full week was not available, so to speak but that a person would work two and a half days in one week and again in the following week. I do not know how payment would be made in that case. If, for example, he worked five days and had a free week the next week, would he get £140 for that week or would he collect £70 and £70 the following week? I assume that would be the way. I made the point yesterday that to a large extent the scheme will fuel the black economy. A person who would work his five days knowing that he had a free week the next week could set himself up with some other job such as building an extension to a back kitchen on somebody's house, if he were a handy man. Surely he would view that black economy activity as legitimate. Therefore, we are refuelling the black economy if we allow that situation to develop. I would consider the [1044] two and a half day's arrangement to be the better one.

Mr. Pattison: The details of the scheme are a matter for the Minister for Labour. The five day working arrangement would be seen as an exceptional arrangement and a case would have to be made for it. Some schemes could have a three day-two day on alternate weeks because some local authorities have already expressed the view that a half day working is not a very productive arrangement. It costs nearly as much to administer a half day's work as it does to administer a full day's work. As far as possible what is envisaged in the scheme is what is stated — a two and a half day week — but where sound proposals are made from local authorities or other bodies sponsoring this work that they would work better on a three day-two day week, those certainly will be given full consideration as will cases in which a five day one week, no work the next week, variation is proposed. These variations of the scheme are not ruled out although they will not be encouraged. It would not be seen as being the most satisfactory way of operating the scheme, yet, if it suits a project, we should facilitate it.

Section 2 deals with the social welfare aspect of the work. We are not dealing with the arrangements of the work which are certainly a matter for another Minister.

Mrs. McAuliffe-Ennis: In relation to the person participating in the scheme, for a two-and-a-half day week would his employer be expected to pay a class A contribution?

Mr. Pattison: That is under a different section. We are dealing with section 2 here.

Mrs. McAuliffe-Ennis: In relation to class A contributions I am confused by something the Minister said whereby even if class A contributions were paid for the employee on his week off, the participant on leaving the scheme will not benefit from unemployment assistance. I [1045] can see a difficulty in that. I would like to have further clarification on it.

Mr. Ferris: If people are working under this scheme we accept that the credit they get under the Social Welfare Act will be treated as a credit in addition to the J rate contribution. In the event of their getting alternative employment for the balance of the week and paying a proper contribution under the PRSI system, will a person who has achieved 13 of the proper contributions from another employer, apart from the credits given under this scheme not qualify in the 13 weeks for his normal benefit?

In relation to the week on and week off aspect, we must not confuse this scheme with competitive employment. This is a social employment scheme. It is imperative that whichever scheme is being formulated it be as flexible as possible. If the employer were to be the local authority, it would be unlikely for a person to have one full week off and one on but in a community project it is possible that an employer would require a person for one full week but not necessarily the following week. The person will be disqualified from claiming unemployment assistance which will cover the problem Senator Cregan has mentioned. There will not be a black economy situation. We should not confuse the scheme with ordinary commercial employment. It certainly does not interfere with that and it is supernumerary to any existing employment. It is important to have flexibility, especially for community employers, such as schools and other community bodies that would need people on a sporadic basis. I see nothing wrong with flexibility. It would not be the norm but it is important to have it if required.

If a proper contribution is paid by another employer in the balance of the week, after 13 weeks of such contributions would the person not normally be legally entitled to requalification for benefit.

Mr. Conway: I see this Bill as an incentive to get people back to work. The wrangle over whether a person works [1046] three days one week and two days the next week is totally wrong. There should be total flexibility on this. If a job has to be done, to restrict the person to three days one week and two days the next week, lessens the continuity of the job. A week-on, week-off system would be better. A problem arises in this scheme because of the special arrangements made for tax purposes. When a person goes to work a second week he then has to produce a tax certificate. If a person is working for a local authority one week, the community centre the following week or with the VEC the next week, there should be flexibility in regard to the regulation of his tax. At the moment the whole tax system is choked up and one department deals with one area of work and another area deals with another, so that a situation could arise in which people are wrongly penalised because they are working in different areas.

The object of this scheme is to get people back to work. It involves community work which will be of major benefit to local authorities and many schools who have already taken up this scheme. It should be borne in mind that the scheme is to cater for long-term unemployed people. The taxing of these people is an area that should be looked at with a view to solving tax problems that might arise.

Mrs. Honan: I, as much as every Government Senator, totally support any Bill that may give some kind of work to 10,000 people. It is important for all of us to be clear as to what this legislation will do. Many Senators and others are confused about aspects of the proposed scheme. However, I understand that a further explanatory document will be issued by the Department in January so that we can explain this to our constituents.

We all know that the social welfare system has been abused. Under this Bill, the system can be further abused in a big way. That should be of concern to the Minister. If we knew what kind of legislation the Minister for Labour was going to introduce we might have a clearer idea [1047] of the scheme. I support any scheme that will give jobs to the unemployed. We certainly need more explanatory material, so that people other than the local authorities will understand it. In the community area, one deals with a different type of person, for example community leaders like Father Sean Sexton who leads the youth movement in Clare. He is absolutely committed to his job, but he would have to have more information before him than we have today in relation to taxation snags, combating unemployment and so on.

Mr. Cregan: The officials and the Minister are aware of the pitfalls that could be created by the five-day week. That is the main point. I am aware that there was talk of a two-day or three-day week. It could protect the other person who was not working and give him more of a chance to get work, rather than one person getting it all. I agree in principle that the section should pass.

There is room for thought as to whether or not a person in temporary or full-time employment should have the responsibility of protecting himself as regards his own payments of PRSI and PAYE. We have helped to create a black economy by not having a stamp system rather than a PRSI payment. If a person is working for two or three days a week, he must have the total responsibility of bringing with him his stamp, or his book, or, a metal plate or something like that. We are a little too loose as regards payments.

Mr. Conway: I agree with Senator Cregan. It is recognised in the new companies Bill, which is being drafted at the moment, that this situation arises, whereas before this people had a card on which their stamps were put. Now it depends on the computer and the person operating it. They do not know from time to time exactly what is happening.

Arrangements should be made for people moving from job to job. If they are moving from A to B they should know [1048] that there is some system whereby their PAYE and PRSI contributions are being recorded and sent in. Senator Cregan is correct in saying that there should be some kind of a card which people could present to the next employer. It is important to ensure that people coming off long-term unemployment are protected properly, that this system is not abused. It is important also that they know what their situation is at all times. Some kind of arrangements should be made for people moving from job to job in relation to their tax and their PRSI deductions.

Mr. Pattison: On Senator Conway's point about the position of employees who move from one job to another during the course of the scheme, it will be a matter for the Revenue Commissioners to work out the appropriate arrangements. The House will be aware that in order to qualify for the scheme participants must be unemployment assistance recipients. When they are under the scheme they do not get unemployment assistance. Section 4 disqualifies them from that. There is a necessity to put in a section to disqualify unemployment benefit also.

The section says that a person shall be disqualified for receiving unemployment benefit during any week in which he is employed under a scheme administered by the Department of Labour and known as the social employment scheme. In other words, once he or she finishes with the scheme, section 2 no longer applies. It applies only when they are participating in the scheme and it prevents them from receiving unemployment benefit while they are participating in a scheme like this.

Question put and agreed to.


Question proposed: “That section 3 stand part of the Bill.”

Mr. Fallon: The Minister stressed in his speech yesterday that this was in relation to occupational injuries benefit only. [1049] Could I sound a warning? Unfortunately there is nothing the Minister can do. This is similar in ways to the AnCO schemes and other types of schemes for people doing community work, and so on. It is all right if the local authority are involved. Normally the employer extends the public liability insurance to cover people taken on. They are not employees within the full definition of the Act. I am talking now about the common law situation where an employee might prove there was negligence on the part of the employer. With the public liability market as it is, while it might be all right for the local authorities who have had public liability insurance for years — and many of them have a reasonable record — I am thinking of a new community grouping which might be set up and might want cover under this scheme. I hope I am proved wrong but they might well have difficulty in getting appropriate public liability insurance. I just want to sound a note of warning and I sincerely hope that I am proved incorrect.

Mr. Cregan: Community associations and community councils who were trying to create jobs had a very serious problem in trying to get proper cover for their employees. Is there any way in which we can ensure that these people will get more commitment and more assistance from the relevant Departments before they get involved? There were serious problems in the Cork area for some groups who were trying to create as many jobs as possible and who could not get proper insurance cover.

Is it possible to define the cover needed for these people before they start to try to create work? These people are biased and rightly so. They do not know the rulings and the laws and, if they were assisted properly, they might create more work.

Mr. Conway: This has arisen over the last few years. Most insurance companies have put a premium on public liability [1050] insurance and it is nearly impossible to get it.

Mr. Fallon: A very high one.

Mr. Conway: A massively high one. Many companies I know cannot and do not have any public liability insurance. The reason is that they cannot afford it. If they had it, it would put them out of business. New community groupings are starting up who do not know about it. Even if they did, the premium would make it prohibitive. We are trying to get people to work and into community work. We are trying to get people who have been on long term unemployment assistance back to work. It is vital that we initiate a scheme under which people involved in community work would be covered in the event of something happening. A community group who have a certain number of employees should be covered by the Department.

Mrs. Honan: This is the section where the medical card will come into play. There is a jump in the figure to £70. It is all right for Senator Conway to say we should all agree that everything is great because this will give jobs to 10,000 people. I would feel as supportive of anything that would give ten people jobs as my colleague on the Government side of the House. We have to make sure that that person has not got a job even before he comes to us. I certainly will do all I can in my constituency to help people to participate in it. We have to make sure they are covered by insurance and that they will not be worse off through participation in the scheme. Will the medical card be left to the person who is in this scheme? Certainly the people we would advise to participate in the scheme would have medical cards. Whether we are talking about young, middleage or old we all know the hassle of medical cards. Does the £70, plus whatever few pounds they may earn, mean that their medical card could go?

Are the levies to be paid by anybody participating? Who pays the levies? If the employers have to pay the levies, will [1051] that cause them to give ten instead of 20 jobs or five instead of eight jobs? It is very important that we know what this is all about. That is why I am delaying the House in asking the questions. This is the time to do it.

Mr. Pattison: The point raised by Senator Fallon in relation to common law liability is important. The Department of Labour and the Manpower Service will not be liable for compensation arising out of any injury or accident involving any person, including any workers, during the course of a project. The organisers should protect themselves against such an eventuality by taking out adequate insurance cover, and for voluntary organisations grant approval will be conditional on the project organisers providing proof of such cover. All sponsors will be required to furnish a statement indemnifying the Department and the National Manpower Service against all compensation claims. That is not to say that the problem expressed by Senator Fallon and others about the possible difficulty in getting cover is overlooked. I understand that the National Social Service Board have been looking at the question of people involved in voluntary work. The views expressed by the Senators will be conveyed to the proper authorities. I understand that the Department of Labour have also been in touch with the Department of Industry, Trade, Commerce and Tourism on this very issue to ensure that this important aspect is fully taken care of. We are very conscious of it.

Question put and agreed to.

Section 4 agreed to.


Question proposed: “That section 5 stand part of the Bill”.

Mr. Fallon: I am aware that negotiations did take place between unions and different groupings. Can I assume that [1052] there will be no reneging in the area of this aspect of the Bill?

Mr. Pattison: I do not understand what the Senator means by “reneging”.

Mr. Fallon: That builders will not renege on what has been agreed upon.

Mr. Pattison: There is a registered agreement that is legally binding between the parties. That arrangement has existed for a number of years and it has proved satisfactory.

Mr. Fallon: It cannot or will not happen?

Mr. Pattison: It can only happen with the mutual consent of the parties to the agreement. That is my understanding.

Question put and agreed to.


Question proposed: “That section 6 stand part of the Bill”.

Mr. Cregan: On the question of the weekly contribution, are there moneys owed to builders because of wet-time claims up to 7 January 1985? According to the Minister's statement yesterday there may have been losses last year. Are the Government liable to pay these amounts? Are we protected in any way or what is the situation?

Mr. Pattison: The money that is owed under the scheme must be claimed by the end of March. All those claims will be met. It is important to point out that the fund as it stands is not sufficient to meet the claims, so that it will have to get special funding from the Exchequer.

Mr. O'Leary: I congratulate the Minister on abolishing the concept of wet-time which is totally irrelevant. As well as introducing a new scheme in the earlier sections of the Bill, the Minister is adopting a very sensible course. When any scheme has outlived its usefulness it [1053] should be taken away. I have no objection to any increase in the number of State schemes if they continue to be useful. The Minister has correctly identified the wet-time scheme as no longer being useful.

The Minister might inform me on a technical matter with regard to section 6 which deals with section 241 of the Consolidation Act, 1981. Section 241 is a section of the 1981 Act which has four subsections. It lays out the people that are liable to make contributions and the rate of contributions which they are liable to pay. The Minister in seeking to abolish this scheme is simply adding a new subsection which says that the rate of contribution shall be nil from 7 January 1985. Why does he not abolish the scheme altogether by removing the whole section from the Consolidation Act? It appears to me that it will be open to a new Minister to put in a new rating. We are leaving the legal framework there and just specifying the rate of contribution for the time being. I would be much happier if we were abolishing the scheme and taking it out of the law altogether. If anyone in the future wanted a new wet-time scheme, then that would require not just new legislation to change the rate of contributions but new legislation to reconstruct the whole thing. This kind of legislation should not be left on our Statute Book.

Mrs. Honan: Senator O'Leary is making sure that when the next Government come in there will be nothing left, so that we cannot take up where they have left off. The Minister may recall Senator Fitzsimons's contribution yesterday in which he referred to the workers in local authorities, seeing that so much of this Bill is zooming in on local authorities. I support the abolition of wet-time in the construction industry, but Senator Fitzsimons made a very important contribution in his Second Stage speech regarding county council or local authority workers and perhaps the Minister would give serious consideration to his suggestions.

[1054] Mr. Pattison: On the point raised by Senator O'Leary regarding the necessity for inserting a new section in the Principal Act, the answer to that is that there are, and will be for some time, outstanding contributions. Therefore, the relevant section has to be left in to enable the contributions to be collected. It is envisaged that the fund will be there for some time because of arrears of contributions. Of course, it is thought that in the long term the section will disappear when the Social Welfare Acts will be consolidated again. However, at the moment it is necessary to retain the other sections of the Principal Act to enable the arrears to be collected. That is why the new subsection states that no weekly contributions shall be payable pursuant to subsection (3) in respect of any calendar week that commences on or after 7 January 1985. However, the amount must be collected for all the weeks before that.

Mr. O'Leary: I think we could do that in a much more elegant way.

Mr. Pattison: With regard to the point raised by Senator Honan, local authority workers were not covered by the Act dealing with wet-time. It would be a matter for negotiation as it is a question of working conditions and it would not be appropriate in this Bill to include a section that would either improve or disimprove working conditions. It would be a matter for the various trade unions involved and the management of local authorities to see if there was any need for improvement in that area and to negotiate that aspect.

Mr. O'Leary: After a reasonable time has elapsed to enable any outstanding amounts to be collected, would the Minister consider repealing section 241 and the other relevant sections at that time rather than waiting for a new consolidation of the Acts?

Mr. Pattison: I should like to assure the Senator that it will be considered at that time.

[1055] Question put and agreed to.


Question proposed: “That section 7 stand part of the Bill.”

Mr. Fallon: How does the Minister propose to advise employers with regard to the last date for applications for repayments of wet-time benefits? Will there be any flexibility in the matter? If a claim comes in at the end of April, will the Minister show some flexibility with regard to repayment?

Mr. Pattison: Information with regard to this matter will be published by way of advertisements in the newspapers and in any other appropriate way. All reasonable steps will be taken to ensure that employers will be aware of the fact that all claims must be in not later than 29 March 1985. The fact that the date is in the Bill makes it impossible for any degree of flexibility but employers have a clear three months to put in their claims.

Mrs. Honan: I am putting this question to the Minister of State because I have perhaps more faith in him than in the Minister, Deputy Quinn. When the Minister brings forward the new scheme will the Minister of State ensure that an explanatory letter is sent to youth groups and to community groups? I know there will be confusion and it will be very difficult to sell the scheme. Having seen the way other schemes blew up in our faces, I have a holy horror of the same thing happening here. Any scheme that gives employment to people should be understood clearly so that it will not backfire on us. I support the scheme totally and I ask the Minister of State to keep my suggestion in mind.

Mr. Conway: I wish to support that suggestion. Many groups, especially community groups, are not aware of this scheme and it is important that we communicate it to all sections. The county councils are aware of what is proposed [1056] but many vocational and secondary schools do not know about it and they, as well as the community groups, are not aware of the implications and the advantages of this scheme. We should have a high-powered advertising campaign to make all aware of the benefits of this scheme.

Mr. Pattison: Every effort will be made to have all the information made available to those interested.

Question put and agreed to.


Question proposed: “That section 8 stand part of the Bill.”

Mr. Cregan: Sometime in 1980 it was agreed between employers and employees in the construction industry that a 40-hour week be operated and that employees would be paid for a 40-hour week, irrespective of the weather. Now in 1984 it is said that central Government must pay any moneys falling due that cannot be covered by the scheme. I understand there is not enough money for the people who are claiming under the 1980 scheme. What we allowed to happen in the four years since then shows a lack of responsibility on our part. There was an agreement between trade unions and the employers with regard to a 40-hour week. We should be able to question why we have to pay money because the employers know that since 1980 they had to pay for a 40-hour week.

Question put and agreed to.

Sections 9 and 10 agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.