This is a major section of the Bill and deals with social insurance benefits. The measures included in this Bill represent an unprecedented improvement in the level of income maintenance support provided by my Department and will significantly improve the position of those dependent on social welfare, particularly families. The approach I have adopted is to concentrate the available resources on improving the basic levels of payment in line with the recommendations contained in the report of the Commission on Social Welfare and in the ESRI poverty report.
The 1988 and 1989 budgets provided significant increases for those dependent on the lowest levels of payment and it must be recognised that these increases are not reflected in the results of the ESRI survey. Deputies will recognise the major improvements I have brought about since the ESRI survey was carried out. This section deals specifically with the social insurance side of these improvements. I have maintained the complete system of social insurance and since last year have extended coverage under the social insurance scheme to bring in the self-employed. Of course, this has resulted in additional considerable income being brought into the social insurance fund and a reduction in the cost to the contributor. Therefore, the PRSI payer is benefiting under the more equitable arrangements introduced last year and this is reflected in the cost of providing the increases under this section. Consequently, there has been no increase in the PRSI contribution rates, either this year or last year. In addition, we have through better management and control also made considerable savings for the taxpayer and for the PRSI member while, at the same time providing a better service. The overall package of social welfare improvements of which this is part will this year cost £157 million on a full year basis.
Subsection (1) of section 3 provides for an increase of 3 per cent in the weekly personal adult and child dependant rates of both social insurance and occupational injuries benefits. The new rates of payments are set out in Schedule A to the Bill. These levels of increase are in line with the commitment contained in the Government's Programme for National Recovery,“to maintain the overall value of social welfare benefits” and have been achieved without any increase in PRSI contribution rates.
Since taking up office the Government have more than honoured their commitment to maintain social welfare payments in real terms. The personal rates of social welfare payments generally have increased by 6 per cent since July 1988 while the personal rates of long term unemployment assistance have increased by 24.3 per cent over that period. To give some examples of the results of these increases in social insurance benefits, an old age contributory pensioner with an adult dependant, in other words, a couple on old age pension, will now receive £102.20 per week; a contributory pension for a widow with three children or for a deserted wife with three children will now be £96 per week; a person on invalidity pension with an adult dependant under 66 years of age will receive £85.60 and with three children will receive £119.80 per week. A person in receipt of unemployment benefit with three children will now receive £124.30 per week. This is a payment of £105.80 plus £18.50 in pay-related benefit, and is on the basis of the full pay-related benefit rate of 12 per cent which applies right throughout the period. A person on unemployment benefit, with three children, and who is in receipt of pay-related benefit will receive £124.30. In addition, in this section we have been streamlining the adult and child dependant allowances. Since July 1988 the number of different rates of child dependant allowances for all social welfare schemes has been reduced by two thirds, from 36 to 12, and a minimum child dependant allowance of £10 per week per child is being introduced. On the social insurance side an estimated 385,000 recipients with 278,000 dependants, a total of 663,000 people, will benefit, therefore, from these increases. The effective dates are: for unemployment benefit 20 July, for retirement pensions 27 July and for old age and widow's pensions 28 July. The date, July, is similar to last year's date in this respect.
This is very fair, worth while maintenance of the social insurance fund and of the benefits which members have from this fund. Because of both the savings we have been able to have over the period through increased control and management and the improved income as a result of the self-employed participating at this time, we are able to do this without increasing the rates of social insurance contributions.