Committee Reports > List of Committees > Dáil > 1958 > Committee of Public Accounts > Report - Appropriation Accounts 1956 - 1957

APPENDIX XVI.

SOCIAL INSURANCE FUND: INVESTMENT RETURN

Cléireach,

An Coiste um Chuntais Phoiblí.

At the end of my examination before the Public Accounts Committee on 24th April, 1958, in connection with the Appropriation Account of the Vote for Social Insurance, 1956-57, I was asked by the Chairman to supply a note on the subject of Investment Return on expenditure under Section 21 of the Social Welfare Act, 1950, as amended.

I append a note accordingly.

(Signed) W. A. HONAHAN,

Rúnaí Cúnta,

Roinn Leasa Shóisialaigh.

12 Meitheamh, 1958.

Section 21 of the Social Welfare Act, 1950, as amended, empowers the Minister for Social Welfare to make payments out of the Social Insurance Fund in respect of expenditure by him on the acquisition of lands, premises, furniture or equipment or the construction or reconstruction of premises, any such lands, etc., to be held by him on behalf of the Fund. The Section provides that, in respect of such payments, an investment return in the form of contributions shall be made into the Fund out of moneys provided by the Oireachtas and that these contributions shall be at rates to be agreed upon from time to time between the Minister for Social Welfare and the Minister for Finance.

The premises known as Áras Mhic Dhiarmada were acquired, completed and equipped under the Section in question. Provision for investment return on the expenditure thus incurred by the Social Insurance Fund is made in Subhead B of the Vote for Social Insurance.

The Exchequer contribution to the Fund in any year in respect of investment return is such sum as will give the Fund—

(a) a return on the total expenditure under Section 21 equivalent to the average yield on the securities of the Fund in that year, plus

(b) an amount to cover depreciation on furniture and equipment, calculated at a fixed rate of 3½% on that portion of the total expenditure from the Fund which was expended on furniture and equipment.

There are, however, two offsets against the gross Exchequer contribution referred to in the previous paragraph. One arises in connection with office premises in O’Connell Street, Dublin (Áras Brugha), which were the property of the Social Insurance Fund (as successor to the former National Health Insurance Fund) and which were vacated on transfer of the staff to Áras Mhic Dhiarmada. The other offset is in respect of rent payable by Córas Iompair Éireann for the bus station portion of Áras Mhic Dhiarmada. The amounts of the offsets are respectively:

(a) the yearly interest, at the rate applicable under (a) above, on the sum of £300,000, the amount which accrued to the Social Insurance Fund in February, 1955, consequent on the disposal of Áras Brugha to the Office of Public Works;

(b) the rent payable by C.I.É. for the bus station. (The rent payable has not yet been finally agreed but for the purpose of provisional payments of investment return is put at £15,000 a year, the rent demanded from the Company).

The provision made for investment return in Subhead B of the Vote for Social Insurance, 1956-57, was £39,000. The expenditure from the Subhead was £38,922, representing gross interest amounting to £67,422 less offsets of £13,500 in respect of Áras Brugha and £15,000 in respect of rent for the bus station.

As will be noted from the foregoing, provision is made in the calculation of investment return for depreciation of the furniture and equipment installed in Áras Mhic Dhiarmada. It is not considered necessary to provide for an annual payment by the Exchequer in respect of depreciation of the building, as there is an annual charge on voted moneys for its full maintenance in an efficient state by the Office of Public Works. This, it is considered, should maintain the value of a building of the type of Áras Mhic Dhiarmada.