Social Welfare Act 2010


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EXPLANATORY MEMORANDUM

Introduction

Main Provisions

The Bill is designed to give legislative effect to certain Social Welfare measures announced in the Budget Statement of 7 December 2010, which are due to come into effect from 1 January 2011. These include the abolition of the income ceiling for employees and optional contributors and the abolition of the Health Contribution, commonly referred to as the Health Levy. The Bill also provides for an increase of 1% in the rate of PRSI contribution payable by self employed contributors giving a new rate of 4%. The Bill also provides for reductions in the weekly rates of social insurance benefit and social assistance payable to people of working age. It also provides for reductions of €10 each in the monthly rates of child benefit for the first, second and the fourth and subsequent children and also provides for the introduction of a new rate of benefit for the third child with effect from 1 January 2011. It also provides for miscellaneous amendments to the Social Welfare Code.

The Bill comprises 3 Parts and 15 Sections.

Part 1 — Preliminary and General

Section 1 provides for the short title, construction and any necessary commencements and Section 2 provides for the definition of common terms used throughout the Bill.

Part 2 — Amendments to Social Welfare Acts

Section 3, together with Schedule 1 to the Bill provides for the reduction in the weekly rates of social insurance benefit payable to people of working age, as provided for in the Budget, with effect from the beginning of January 2011.

Section 4 together with Schedules 2 and 3 to the Bill provides for the reduction in the weekly rates of social assistance payable to people of working age, as provided for in the Budget, with effect from the beginning of January 2011.

Section 5 provides for reductions of €10 each in the monthly rates of child benefit for the first and second child and for the fourth and subsequent children, as well as for the introduction of a new rate of child benefit for the third child, with effect from 1 January 2011.

Section 6 clarifies the legislative provisions in relation to the payment of various increases with disablement pension so as to ensure that the increases of disablement pension for qualified adults, children etc. can only be paid where the disablement pensioner is entitled to an incapacity supplement.

Section 7 provides for changes in the reduced rate of jobseeker's benefit for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the National Employment Action Plan. This change is consequential on the reduction in rates provided for in section 3.

Section 8 provides for changes in the reduced rate of jobseeker's allowance for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the National Employment Action Plan. This change is consequential on the reduction in rates provided for in section 4.

Section 9 provides for changes in the reduced rate of supplementary welfare allowance for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the National Employment Action Plan. This change is consequential on the reduction in rates provided for in section 4.

Section 10 provides for repeals consequential on sections 7, 8 and 9.

Section 11 provides for the abolition of the income ceiling of €75,036 applying to the PRSI contributions payable in the case of employees, voluntary contributors and optional contributors (who are engaged in share fishing), with effect from 1 January 2011. The section also provides for a number of consequential amendments to the Social Welfare Consolidation Act 2005.

At present PRSI is levied on gross income, less any superannuation contributions payable. Section 12 provides for the abolition of PRSI relief on employee superannuation contributions payable with effect from 1 January 2011.

At present both employer and employee PRSI is levied on gross income less any superannuation contributions payable. While section 12 provides for the abolition of PRSI relief on employee superannuation contributions payable, Section 13 provides for a reduction of 50% in the PRSI relief available for employer PRSI contributions arising from the employee superannuation contributions payable.

Section 14 increases the rate of PRSI contribution payable by self-employed contributors by 1% to 4%.

Part 3 — Repeal of Health Contributions Act 1979

Section 15 provides for the abolition of the Health Contribution payable under the Health Contributions Act, 1979, with effect from 1 January 2011. This section also provides that any liability for health contributions assessed after 1 January 2011 in respect of tax years before 2011 are payable and that matters relating to the estimation, collection, recovery or refund of those contributions or of interest thereon or other proceedings relating to those contributions or that interest can be enforced.

Last modified:23/06/2011
 

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