Social Welfare and Pensions Bill 2014


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AN BILLE LEASA SHÓISIALAIGH AGUS PINSEAN, 2014

 

SOCIAL WELFARE AND PENSIONS BILL 2014

 


EXPLANATORY AND FINANCIAL MEMORANDUM


 

Purpose of Bill

This Bill amends the Social Welfare Consolidation Act 2005—

(a) to provide for the transposition of certain aspects of Directive 2010/41/EU on the principle of equal treatment between men and women engaged in an activity in a self-employed capacity, in so far as they relate to ensuring that the spouse or civil partner of a self-employed worker can benefit from social protection in accordance with national law,

(b) to strengthen the residence requirements relating to entitlement to social assistance payments and child benefit,

(c) to strengthen control of social welfare expenditure by extending the powers to recover social welfare overpayments, and

(d) to make a number of other changes to the social welfare code arising from policy, administrative and operational matters.

The Bill also amends the Pensions Act 1990 to clarify certain provisions in the Act in relation to the notification of members of a defined benefit pension scheme regarding the restructure of scheme benefits under section 50 or the wind up of a pension scheme under section 50B of the Act.

 

Provisions contained in Bill

There are 22 sections in this Bill, arranged in 3 Parts.

 

Part 1 — Preliminary and General

Section 1 provides for the short title of the Bill, its construction and collective citation and for the commencement of certain provisions contained in the Bill by way of commencement order.

 

Part 2 — Amendments to Social Welfare Acts

Section 2 provides for the definition of certain common terms used throughout Part 2 of the Bill.

Section 3 provides for changes to enable functions relating to payment of benefit or assistance and related payment services to be provided under arrangements with selected payment service providers.

Section 4 provides that only gains from share option transactions which result in the employee actually receiving shares will come within the definition of ‘‘share-based remuneration’’ in order to benefit from the exemption from employer PRSI liability.

Section 5 clarifies the powers contained in the Social Welfare Consolidation Act 2005 enabling the Minister for Employment Affairs and Social Protection to make regulations providing for refunds of employer PRSI contributions in the case of certain seafarers employed on board vessels that are registered in a Member State of the EU or European Economic Area and are providing scheduled passenger services between ports within those States.

The Redundancy Payments Act 1967 provides for lump sum payments by employers to their employees upon their dismissal by reason of redundancy. Where an employer does not pay such a lump sum payment to his or her employees who have been made redundant, the Redundancy Payments Act provides that such payments can be made by the Minister for Employment Affairs and Social Protection to the employee. The Minister can then recover such amounts from the employer. Section 6 provides that where an employer has a debt owing to the Minister in respect of redundancy lump sum payments and that employer qualifies for a refund of PRSI contributions, then the debt owing to the Minister can be recovered from the PRSI refund.

Section 7 provides that increases in jobseeker’s allowance, preretirement allowance, supplementary welfare allowance, disability allowance or farm assist in respect of the qualified adult of the recipient will not be payable for any period during which that qualified adult is—

  1. resident, whether temporarily or permanently, outside the State, or
  2. in prison or otherwise detained in legal custody.

 

Section 8 clarifies the position in relation to entitlement to family income supplement (FIS) in cases where the claimant is living apart from his or her spouse or civil partner and children. In these circumstances, in order for the children to be regarded as forming part of the family for FIS purposes, the worker must be maintaining his or her spouse or civil partner and contributing substantially towards the maintenance of the children.

In general, once FIS has been awarded, it continues to be paid for 52 weeks, regardless of any change of circumstances during that period. Section 9 clarifies the impact that a change of circumstances will have in relation to—

  1. continued entitlement to payment of FIS during the 52 week entitlement period, and
  2. the weekly rate of FIS payable during that 52 week period.

 

Where the worker is no longer engaged in remunerative full-time employment or where that person qualifies for certain weekly social welfare payments, such as jobseeker’s payments and illness benefit, FIS ceases to be paid. Where there is an increase in the number of children in the family or where the FIS recipient was also in receipt of one-parent family payment and that payment ceases due to the youngest child attaining the specified age, FIS can be reviewed before the end of the 52 week entitlement period. In both of these circumstances such a review will lead to an increase in the weekly amount of FIS payable.

Section 9 also provides that where payment of FIS ceases to be paid to a family during the 52 week entitlement period and that family requalifies for FIS before the end of that 52 week period, then payment of FIS will recommence for the unexpired portion of the 52 week period at the rate that was payable at the start of the 52 week period.

Section 10 provides for changes in respect of the application of the habitual residence condition for entitlement to certain social welfare payments. The presumption that persons are not habitually resident in the State if they have not been present for a continuous period of 2 years in the State or any other part of the Common Travel Area at the date of making the application is being removed. In addition, a person must satisfy the habitual residence condition for the duration of his or her claim in order for entitlement to continue. This also allows for the review of habitual residence in respect of persons who were not required to satisfy such conditions under EU law at the date of application for the schemes concerned.

Following on from the changes provided for in section 10, section 11 provides for a number of consequential amendments to uncommenced provisions contained in the Social Welfare and Pensions Act 2008 relating to the transfer of responsibility for the Blind Welfare Allowance scheme from the Health Service Executive to the Department of Employment Affairs and Social Protection.

Section 12 is a minor technical amendment to correct an incorrect reference contained in section 320 of the Social Welfare Consolidation Act 2005, which provides that the decision of a Social Welfare Appeals Officer is, in general, final and conclusive.

Sections 13 and 14 extend the powers for the recovery of social welfare overpayments to include recovery from certain lump sum payments made by the Minister for Employment Affairs and Social Protection to that person, i.e. refunds of PRSI contributions, lump sum payments made under the Redundancy Payments Act 1967 and the Protection of Employees (Employers’ Insolvency) Act 1984.

Section 15 extends the provisions relating to the recovery of social welfare overpayments by way of notice of attachment to include situations where the person who has been overpaid has sources of income from payments made from State funds, e.g. grants, refunds and repayment of tax, etc.

Section 16 provides for the transposition of Directive 2010/41/EU on the application of equal treatment between men and women engaged in self-employment activity, in so far as that Directive relates to ensuring that the spouse or civil partner of a self-employed worker can benefit from social protection in accordance with national law. The amendments provided for in section 16 will mean that liability for social insurance contributions will be extended to spouses and civil partners of self-employed contributors who are not business partners or employees, where they perform the same or ancillary tasks. Liability for self-employment PRSI contributions in the case of such spouses and civil partners will be subject to the same annual income threshold that applies to self-employed contributors in general, i.e. €5,000.

The principal benefit of insurability as a self-employed contributor is access to long-term pensions, including State pension (contributory). As self-employment PRSI contributions also provide cover for maternity benefit, this will comply with the provisions of Article 8 of the Directive, which requires that Member States take the necessary measures to ensure that female self-employed workers and spouses be granted sufficient maternity allowance cover during periods of interruption in their occupational activity due to pregnancy or motherhood.

Section 17 provides for the deletion of 3 uncommenced amendments to the Social Welfare Consolidation Act 2005 which are no longer necessary, i.e.—

  1. provisions relating to disqualification for receipt of social welfare payments and increases of such payments where the recipient or the spouse of the recipient is either absent from the State or in prison,
  2. provisions enabling regulations to be made to provide that more than one qualified adult increase can be paid to the same recipient in certain circumstances, and
  3. provisions enabling the transfer of pension rights accruing under the social insurance system to the pension scheme of the EU institutions and the transfer of pension rights accruing under the pension scheme of the EU institutions to the social insurance system, in certain circumstances.

 

Section 18 provides for a number of minor amendments to the Social Welfare Consolidation Act 2005 to correct minor typographical and textual errors.

 

Part 3 — Amendments to Pensions Act 1990

Section 19 defines the term ‘‘Act of 1990’’, which is used for the purposes of Part 3 of the Bill, as meaning the Pensions Act 1990.

Section 20 inserts a new subsection (2B) into section 50 of the Pensions Act to require the trustees of a defined benefit pension scheme to notify scheme members of the details of a unilateral direction issued by the Pensions Authority to the trustees of a scheme to restructure scheme benefits and of the right to appeal such a direction to the High Court. The trustees of the scheme will be required to submit such a notification to the Pensions Authority within ten days of the date of the notification.

Section 50 of the Pensions Act is also being amended—

— in subsection (5) to clarify the provisions in relation to the notification of scheme members where the Pensions Authority proposes to issue a notice under section 50 of the Act to the trustees of a scheme to restructure scheme benefits,
— in subsection (6) to clarify that an appeal to the High Court must be made within 21 days of the the date of the notification issued under the new subsection (2B),
— in subsection (7) to clarify that a direction issued by the Pensions Authority to restructure scheme benefits will not take effect until 21 days after the date of the notification issued under the new subsection (2B).

Section 21 amends section 50B of the Pensions Act to mirror the changes to subsection (5) and subsection (6) of section 50 outlined above.

Section 22 amends section 50C of the Pensions Act to crossreference
the new section 50(2B).

 

Financial Implications

The measures contained in sections 6, 13, 14 and 15 of the Bill to strengthen the powers to recover social welfare overpayments will lead to savings in overall social welfare expenditure.

No significant additional costs or savings will arise from the other measures contained in this Bill.

Department of Employment Affairs and Social Protection,
May, 2014.

Last modified:30/05/2014