THE Fianna Fail spokesman on social welfare, Dr Michael Woods, said the Government was undermining the stability of the social insurance fund by running it into deficit.

During debate on the Social Welfare Bill, which gives statutory effect to the welfare changes announced in the January Budget, Dr Woods said this was the workers insurance fund to provide for illness, maternity cover, occupational accidents and pensions. It would have a deficit this year of £114 million.

When the Government took over at the end of 1994 the fund was breaking even for the first time in years.

"Reducing the fund weakens the position of workers because every future Minister for Social Welfare will have to go cap in hand to the Minister for Finance for the money from the taxpayer to meet the annual deficit before seeking funds to improve the protection for workers and raise pensions."

Rather than attempting to buy pre-election popularity by reducing PRSI contributions by 1 per cent the Government could have removed the 1 per cent levy. That would not have undermined the stability of the social insurance fund.

The reduction announced in the PRSI contributions would not benefit pensioners. That was "a mean and calculated step" by the Government to remove pensioners from the benefit of the preelection handout. Pensioners would have to continue paying the 1 per cent levy while the better-off would benefit from the reduction of 1 per cent in PRSI.

Dr Woods criticised the proposal in the Bill to require 10 years PRSI contributions for entitlement to a contributory pension. People who were over 56 when they entered the scheme could no longer qualify for a full pension unless they were previously insured.

On the overall level of benefits, he said that at a time of greatly increased national prosperity, Fine Gael, Labour and Democratic Left had turned their backs on the poor and disadvantaged. Over the past three years, old-age pensioners received an increase of a mere £2.33 a week, widows received £2.20 and long-term unemployment assistance went up by £2.17 a week.

The Government was "stagnant" on social welfare over the last three Budgets. "It has not introduced one new scheme or taken any innovative action to improve the lives of people who depend on "social welfare."

The Minister of State for Social Welfare, Mr Bernard Durkan, introducing the Bill, said the system was not perfect but the changes being made this year were a further stage in its transformation. They provided for an improvement in the living standards of all who depended on social welfare through increases in weekly rates of payment which were double the projected rate of inflation for the year.

Regarding entitlement to the contributory old-age pension, he said the National Pensions Board had recommended an increase in the number of paid contributions from 156 (three years) to 520 (10 years). The increase would be phased in up to 2002.

The lengthy time scale recognised the need for a long lead-in when making fundamental changes to State pension entitlements so as to meet people's expectations and allay their fears as much as possible.

The Bill continued the pro-work and pro-family policies which had been central to the work of the Government. It provided a programme of improvements for old-age pensioners and carers; completed the process of ensuring equal treatment for men and women in all welfare schemes; brought about further significant reform of the system through the introduction of new pro-rata pensions and a new sickness allowance; strengthened the system by enhancing benefits available to all workers who paid social insurance; and reversed the damage caused by the infamous "dirty dozen" cuts introduced by the previous Fianna Fail-Progressive Democrats government.

Mr Peadar Clohessy, Progressive Democrats spokesman on social welfare, said that when this Government assumed office 2 1/2 years ago, there were 272 000 registered as unemployed. Today after the most rapid economic expansion in the history of the State the unemployment figures were almost unchanged.

The question had to be asked why it was not possible to translate economic growth into lower unemployment. Tax was obviously a key issue, placing a heavy burden on the average working person. A single person on £200 a week paid about £43 a week in tax and PRSI.

He said that "if a person on £262 a week - well under the average industrial wage - gets a pay rise of £10 a week or does £10 worth of overtime, the Government will take £5.50 out of it and the individual himself will get just £4.50". Could it be right, he asked, "that the Government gets more of a worker's earnings than the worker himself"?

Mr Clohessy deplored the "massive State bureaucracy" which supervised the social welfare and employment service. There should be a single agency, a national employment service. It should deal with the unemployed, benefit, payments and job search assistance. "It should treat people as its clients. The success of that agency should be measured by the number of people it places in paid employment."

Mr Michael Creed (FG, Cork North West) said that with an ageing population there should be a serious look at the cost of pensions. PRSI contributions were meeting only half the welfare budget. "While we are clapping ourselves on the backs about reducing PRSI we are going to have a significantly greater number of people dependent on the Exchequer in the future."

The debate continues