I move that the Bill be now read a Second Time. This Bill provides statutory authority for the increases in civil pensions payable from the Exchequer or other public funds, including the funds of local and harbour authorities, which I announced in the Budget last April. The Bill was introduced in this House on the 28th June, 1960, and under the authority of an Additional Estimate for £127,000 which was passed on the 19th July, payment of pensions increases has already commenced in most cases. This Bill covers civil pensions only; separate legislation is being enacted to cover similar increases in Army Retired Pay, Disability Pensions and Special Allowances and Military Service Pensions.
This year's pensions increases extend to all pensioners who retired before the general pay increases of 1st November, 1955, or whose pensions were calculated in whole or in part on the salaries payable before that date. In some cases, although retirement took place after the 1st November, 1955, pension was calculated on average salary over a period which fell partly before and partly after 1st November, 1955. Special provision has been made in Section 7 of the Bill to allow a proportionate pension increase in such cases. A pension calculated on average salary can accordingly be increased even though retirement took place as late as 1958.
The increases under this Bill, like those granted last year, are weighted in favour of those pensioners who are longest retired and whose pensions are lowest in relation to current levels. Pensions calculated on the salaries in force prior to the general pay increase of 1st November, 1948, are being increased by 7½ per cent. while pensions calculated on the salaries payable during the period between 1st November, 1948, and 1st November, 1955, are being increased by 5 per cent. A proportionate increase is provided under Section 7 of the Bill for pensions calculated on average salary over a period which fell partly before and partly after 1st November, 1948.
As explained in the White Paper circulated with the text of the Bill, in any case where pay increases corresponding to the Civil Service pay increases of 1st November, 1948, and 1st November, 1955, were granted on other dates, eligibility for the 7½ per cent. or the 5 per cent. increase will be determined by the actual date of the pay increase.
The Bill follows generally the lines of the Pensions (Increase) Act, 1959, and its provisions have been explained in detail in the White Paper already circulated. There is, however, one change which I think will appeal to Deputies; the provision restricting pensions increases within the limits of an overriding maximum, which was a feature of previous Bills, does not appear in the present Bill.
The Exchequer pensions which are increasable under Sections 3, 4 and 7 of the Bill are listed in Parts I and II of the Schedule to the Bill. The fixed pensions payable to widows and children which are specified in Part II of the Schedule are increased by 7½ per cent. or 5 per cent. according as the basic rates were fixed before or after 1st November, 1948. Increases in these fixed rates will apply to future grants as well as to pensions currently in course of payment.
Sections 5 and 6 empower local authorities and harbour authorities to grant increases in the pensions payable by them which are specified in Part III and Part IV of the Schedule. The increases will be subject to the approval of the Minister for Local Government or the Minister for Health in the case of local authority pensions and to the approval of the Minister for Transport and Power in the case of harbour authority pensions. The increases allowed will be similar in amount and will be generally subject to the conditions and limitations governing increases in Exchequer pensions.
Under Section 8, increases are payable from 1st August, 1960, or the date of commencement of pension, if later.
Section 10 contains various consequential provisions, in particular, for the application to the pension, as increased, of any statutory provisions as to payment, etc., applicable to the original pension. It also provides that any increase in the Bill shall not be assessed as means for the purpose of an Old Age Pension or a widow's noncontributory pension.
The cost of the Bill to the Exchequer is estimated at £118,000 in a full year, including recoupment of part of the increases payable by local authorities. About 7,620 Exchequer pensioners will benefit under the Bill. Of these, about 3,880 will receive a 7½ per cent increase and about 3,740 a 5 per cent increase. The main categories of pensioners are:
2,089 Civil Service pensioners: estimated cost, £40,300 in a full year; 2,705 national teachers: estimated cost, £37,000; 2,440 Garda pensioners and widows: estimated cost, £24,100; 386 R.I.C. pensioners and miscellaneous: estimated cost, £4,500.
This makes a total of 7,620 pensioners at an estimated cost of £105,900. Recoupments to local authorities are estimated to cost a further £12,100 to bring the total to £118,000. In addition to these Exchequer payments, it is also estimated that local authorities will expend about £15,000 in a full year out of their own funds on pensions increases.
The cost of the Bill in the current year will be about £72,000, and the balance of the £127,000 voted by this House in July last will be required for increases in Army pensions, Retired Pay, Military Service pensions and Special Allowances, which will be covered by separate legislation. Including the increases in these pensions and allowances, the total cost to the Exchequer of the 1960 pensions increases is estimated at approximately £212,000 in a full year.
I recommend this Bill to the House for its approval.
