Dáil Éireann debate -
Tuesday, 21 Jul 1959

Vol. 176 No. 11

Committee on Finance. - Vote 67—Increases in Pensions—(Additional Estimate).

Dr. Ryan

I move:

That a sum not exceeding £72,200 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1960, for payment of Increases in certain Pensions, etc., in respect of public service.

This is to cover the Budget provision for the increase of pensions to State pensioners. The cost of that provision in a full year would be £127,000. It is payable this year from the 1st August and consequently the cost is £72,200. The factors which govern the grant of this increased pension are length of service and salary on retirement. Superannuation terms are prescribed by statute and in most cases provide that pension on retirement would be a due proportion of retiring pay and this addition is given in certain cases.

Generally the increases will be payable to the classes covered by the Pensions (Increase) Acts 1950 and 1956, that is, former civil servants and officers of local authorities (including vocational teachers), former members of the Garda Siochána and their widows, and pensioned national teachers. Army retired pay and disability pensions, military service pensions and Connaught Rangers' pensions will also be increased. Corresponding increases will be allowed in the pensions of former employees of local authorities and of harbour authorities, and a small provision has been included in the Estimate to meet any charges which may fall upon the Exchequer during the current financial year in respect of recoupments of increases in local authority pensions.

The increases are restricted to pensioners whose pensions were calculated by reference to the salaries payable before the general pay increase of 1952. The pensions of those who retired before the operative date of the general pay increase of 1948 will be increased by six per cent. The pensions of those who retired after the 1948 pay increase and before the operative date of the general pay increase of 1952, will be increased by four per cent. The operative dates in most cases will be the 1st November, 1948, or the 1st November, 1952, but cases where the pay increases were effective from other dates will be determined by the appropriate dates. An overriding limit will apply so that no pension will be increased to an amount greater than the pension payable to a pensioner of corresponding rank and service who retired immediately after the 1952 pay increase.

The work of assessing the increases in the various pensions is already in hand. A few pensions will, however, have to await the passage of the new Pensions (Increase) Bill before payment can be made.

Mr. McGilligan

Did the Minister say "a few?"

Dr. Ryan

Yes. Pensions payable from the Central Fund cannot be covered by this Estimate, nor can the pensions of secondary teachers, which are payable out of the Secondary Teachers' Superannuation Fund. The preparation of the Bill is now in progress. It was found impossible to have the Bill drafted for this Session because, as Deputies are aware, the regulations are extremely complicated. They will all have to be fitted in with this Bill when it comes along. It was found impossible to have it drafted in time. I am quite sure that the Bill will be ready when we meet again in October. Most of the pensions can be payable in the meantime. There are just a few who may have to wait until then. These few in any event will be paid retrospectively.

Mr. McGilligan

The Estimate, as I got it, contained a footnote. This will require legislative sanction. I gathered from the Minister that possibly the Appropriation Bill will secure part of it. Special legislation was mentioned at Item 30 on the Order Paper—the Pensions (Increase) Bill, 1959. That Bill must come before the House?

Dr. Ryan

It must.

Mr. McGilligan

I understand that most of the increases may be paid in the meantime. I notice the Minister said that a few will be held over, amongst them being the secondary teachers.

Dr. Ryan

Yes.

Mr. McGilligan

Of the £127,000 which, I think, the Minister said the increases will cost, how much will be held over?

Dr. Ryan

A very small amount.

Mr. McGilligan

Is it £5,000 or £6,000?

Dr. Ryan

A few thousand.

Mr. McGilligan

When that legislation comes before the House in the autumn, will it be possible on the legislation to raise the question of all the pensions? I have been approached by a number of people who complained that the increases offered are miserably small. I should like to raise that. It is not now possible to do it on the legislation because it will not be ready before we leave. I assume that the whole matter can be gone into in the autumn?

Dr. Ryan

Yes.

Mr. McGilligan

If the Minister agrees to give the increases, we shall not be precluded from discussing such increases when the legislation comes in by reason of the fact that the pensions have been paid at the lower rate?

Dr. Ryan

I presume that would be in order.

Mr. McGilligan

Would the Minister see to it that the discussion will be wide enough to cover all the ranges of pensions and the different percentages given? I take it that we are going to have a discussion on these pensions?

Dr. Ryan

Yes, there will be. The regulations were so complicated that it was found hard to cover all the cases. It was recognised before that the fact that the Bill was introduced was sufficient to give me authority to pay the pensions in the meantime.

Mr. Norton

This Estimate is rendered necessary by the decision of the Minister in his Budget statement to grant certain increases to retired civil servants and public servants. He estimates that the cost of the present increases in a full financial year will be approximately £127,000. I think he said in his Budget speech that the cost for the remainder of the financial year would be approximately £58,000.

The Minister proposes to grant an increase of six per cent. in the case of persons who retired before the 1st November, 1948, and to grant an increase of four per cent. where a person retired after the 1st November, 1948, and before the 1st November, 1952. I think these increases of six per cent. and four per cent. are rather small having regard to the extent to which the cost of living has increased since many of these persons retired before 1948.

It is true, of course, that under the Pensions (Increase) Act, 1950 and 1956, other increases were granted. I think that under the 1950 Act it was at an increased cost of £200,000 and unler the 1956 Act about £120,000. Nevertheless, the position of many of these pensioners is really deplorable, particularly where they belong to grades where the salary scales were low. While the percentage may look impressive, nevertheless, the total amount of the pensions could be, as it is in a great many cases, insufficient to provide many of these pensioners with a reasonable means of sustenance.

Many of these people in the Civil Service and elsewhere retired when the cost of living was substantially lower than it is at present. Many of them were superannuated on a salary scale or wage scale which was low and their pensions are correspondingly low. I think it is estimated that there are about 1,500 of the persons now in receipt of basic pensions of not more than about £2 per week. To grant pension increases of four per cent and six per cent on basic pensions as low as that does not, in fact, provide any substantial relief for persons of that type because the increase will amount to nothing more than about 2/- to 4/- a week increase for such persons and with the 1939 £ now worth only 7/4½d, an increase of 2/-, 3/- or 4/- per week makes a very imperceptible contribution to the solution of the financial difficulties of such persons who have served the State for a long number of years.

I should hope, therefore, that by the time the Minister comes to introduce his legislation proper so as to give statutory sanction to the payment of these increases, he will find it possible to be more generous than he is in the percentages of six per cent and four per cent which are granted under this Estimate.

I should like to call the attention of the Minister to an aspect of this matter which does not seem to be dealt with by him in connection with these increases. As I understand the position, to get even the benefit of the four per cent increase, one must have retired before the 1st November, 1952. If you retired in 1953, 1954, 1955, 1956, 1957 or 1958, you get no increase whatever. It can be said that, perhaps, if you retired in the past two or three years, you, nevertheless, get a rate of pension based upon adjusted salary scales.

Admittedly that case can be made but it does seem a bit hard to draw the line at the 1st November, 1952 and to say that if you retired after that date no increase is payable to you. After all, the index figure in mid-February, 1952, was 114 and the index figure for February, 1959, was 147 so that in fact there has been a substantial increase in prices since many officers retired after the 1st November, 1952. In the case of those retiring immediately after November, 1952, and who have not got the benefit of wage and salary increases since that day, because they were not serving officers, the burden is particularly heavy.

I hope that the Minister will examine this matter further and see if he is in a position to extend the retiring date in order to allow people who retired later than November, 1952 to participate in the increase in pensions which this Estimate is intended to cover.

An Leas-Cheann Comhairle

The Minister.

Mr. McGilligan

I should like to speak after the Minister.

An Leas-Cheann Comhairle

It is not usual.

Mr. McGilligan

I thought he was merely going to explain figures. I want to reinforce the point I made earlier about passing this Estimate, which I should be very glad to do, and which will increase pensions for some people between this and the Autumn, but I do not want to be precluded from raising the whole range of pensions when the legislation comes before the House. I take it that the Minister agrees that when the legislation is introduced it will be possible to raise the question of all pensions and not merely those amounting to say £7,000 for whom it is impossible to make any provision in the interim.

I merely want to add to what Deputy Norton said on this Estimate. The old pension increases ranged from 50 per cent. in the case of very low salaries up to 30 per cent. and these increases of 6 per cent. and 4 per cent. certainly do not look very benevolent compared with the others. Deputy Norton pointed out that a considerable number of pensioners are either in the £100 class or less than £100. That means increased pensions may be granted to some of these people for the highest rate appropriate, which is 6 per cent. I am informed that a number of these come down as low as half of that.

There is another point in regard to the date of retirement in order to be entitled to the increase. I do not know whether that date has been fixed but it is a point which I should like to raise on another occasion when there might be a better House present and more time to give it consideration and when it might be possible to influence the Minister to bring in more substantial increases than those now being offered.

Mr. Russell

I should like to support the points raised by Deputy Norton and Deputy McGilligan. Instead of having just a flat increase of 4 per cent. or 6 per cent. could the increase not be related to the size of the pension? Apart from what Deputy Norton has said, I am completely in the dark about the size of the pensions. I do not know whether the Minister has given the House information on this matter on a previous occasion but I find myself passing an Estimate not knowing the amounts of the pensions involved in it. On the question of the Bill, when it is introduced will it be possible to table amendments to it?

Mr. Norton

The Deputy will have to try to convince the Minister to put down amendments.

Mr. McGilligan

We can do that on the Second Reading.

Dr. Ryan

Only a member of the Government may put down amendments to increase taxation so that the Deputy would be precluded from putting down such an amendment. He would be quite free to put down an amendment to reduce taxation.

I received deputations and representations from the State pensioners of various grades and classes. I was more impressed I must say by those who spoke for those who retired in 1948 and before 1952. As I had only got a limited amount of money I asked for a scheme to cover pensioners who went out in 1948 and before 1952 which would as far as possible bring them into line with those who went out after 1952. I do not say that we have done that but we have done it as far as possible. Of course the officials who prepared that scheme would have produced a very much better scheme if we could have given them more money. I think myself that, with the amount of money available, it was better to bring the older pensioners up to a level approximating that of those who went out in 1952 rather than to spread it out over the whole lot. For that reason it was done in that way. With regard to a possible discussion on the Bill I am not in a position to say definitely what might happen. I have no objection to anything being raised provided the Ceann Comhairle allows it.

Mr. McGilligan

On other occasions Ministers have given guarantees that an application will be made to have the scope of the debate widened. There is no desire at the moment to prolong the sitting.

Mr. Norton

We take it that the Minister will look into the position of those who retired immediately after November 1952? There is obvious hardship there.

Dr. Ryan

I am afraid there will always be hardship wherever the date is placed.

Mr. Norton

There is nothing to prevent us trying to remove some of the hardship.

Vote put and agreed to.