Dáil Éireann debate -
Thursday, 28 Nov 1963

Vol. 206 No. 3

Committee on Finance. - Vote 54—Increases in Pensions.

Minister for Finance (Dr. Ryan)

I move:—

That a sum not exceeding £119,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1964, for payment of Increases in certain Pensions, etc., in respect of public service.

In moving this Estimate, I want to apologise for a statement I made yesterday which was slightly misleading. When I was asked what did the Estimate cover, I said it covered all except the Army. As a matter of fact, it covers the Army, too.

The purpose of this Estimate is to seek the approval of the Dáil for increases in Public Service Pensions, including Military Service Pensions and Special Allowances, and to authorise payment of the increases with effect from the 1st November, 1963, in advance of legislation. I hope the necessary Pensions (Increase) Bill, to give statutory authority for the increases, and for those given last year, will be taken very shortly.

When introducing the Budget in April last, I indicated that it had been decided to provide a further increase in public service pensions, thus following up the generous increases given last year, which had already raised pensions above 1955 level, irrespective of how long ago the pensioners had retired. These and later pensioners will benefit under this year's increases which will raise pensions to the level of the higher salaries introduced in December, 1959, for the Civil Service, and on other dates about the same time for other public servants. Flat rate pensions are being increased by a percentage, generally about 5 per cent, determined by reference to increases granted in cognate pensions in relation to pay or cost of living movements or other relevant factors.

The revision of all public service pensions to 1959 level is a notable achievement which has not, of course, been effected without substantial cost to the Exchequer. The total annual cost involved in bringing all pensions to 1959 level is approximately £1.14m., of which £820,000 is in respect of the 1962 increases and £320,000 in respect of this year's increases. These figures include any Exchequer recoupments in respect of part of the pensions increases paid by local authorities.

In this year's Budget, £120,000 was provided to meet the anticipated charge on voted moneys in the current financial year in respect of the increases to 1959 level, which have effect from 1st November, 1963. In the light of the results of more detailed pension calculations which have since been carried out for the various services, it is expected that a sum of £119,000 will be sufficient to meet the current year's charges and provision accordingly has been made in the Additional Estimate before the House. This sum will cover payment of the increases for all pensions paid direct to the recipients out of Votes of the Oireachtas. The main classes of pensioners—former civil servants, national teachers, and so on—appear on the face of the Estimate. Part of the cost of certain local authority pensions, such as vocational teachers pensions, is recouped by the Exchequer and the Estimate contains a small provision to meet any claims which may be presented by the local authorities before the end of the financial year.

Mr. Sweetman

I have always found pensions legislation and administration extremely difficult to follow, but listening as carefully as I could, I found the speech of the Minister equally difficult and I am sorry he did not circulate a copy of his speech before he made it. I might then perhaps—and I use the word "perhaps" advisedly—have been able to follow it more closely.

However, as I understand it, going back to the Budget, the effect of this Estimate is that all pensioners who are now drawing pensions and who retired prior to the 1959 increases in Civil Service and public service pay generally are now brought up to the level of pension at which they would have been if they had retired immediately after the 1959 public service increases in pay were given.

Dr. Ryan

That is correct.

Mr. Sweetman

There have since then been two further revisions in public service pay and I take it that the figure of £1,140,000 the Minister mentioned was the figure for bringing pensioners who retired between 1959 and the present time up to the level of pension at which they would be if they retired on the present scales. That is a substantial sum from the point of view of the taxpayers of the country but it is a very much less substantial sum when one considers it in terms of difficulty and hardship to the individual pensioners and particularly when we remember that they are facing now a substantial increase in the cost of living.

We are all aware of the manner in which the cost of living has increased consequent upon the urge to increase prices that resulted from the Minister's Budget turnover tax proposals. At that time we were told by the Minister that the proposals would not mean any increase of any consequence in the cost of living. We know now that he was wrong in that. We know now that the true position is that the past month has shown a substantial increase in costs, particularly in the cost of the necessaries of life, a cost which falls more harshly on the pensioner than on any other sector of the community and the House will have to face up to the position that another improvement in the lot of pensioners is urgently necessary.

This is not the time or the place to consider the effect of the ninth round discussions that are going on outside the House in relation to public service salaries and pay generally. It is an open secret that the amount of that round will be substantial and that the Minister will find that the cost of the public service will advance very strikingly. It is a pity that because apparently of a nice theoretical calculation the Minister by the turnover tax proposal in his Budget started off this upsurge which will mean the beginning of an inflationary spiral. Whenever there is inflation, the people who are hit most are the pensioners. The people who are living on small fixed incomes are those who suffer most from inflation and while we welcome this contribution towards easing their burden and bringing them up to the 1959 level, at the same time with the outlook ahead, it seems to me clear that in justice to the people concerned a further amelioration in their conditions will have to be brought in at a very early date.

Dr. Ryan

I must sympathise with the Deputy because I know that statements like this when they are read are not easy to follow but the figure I gave of £1.14 million was roughly the figure of the cost of bringing the pensioners up both last year and this year. It is not an estimate of what would be necessary to bring pensions up to the present level. I think the Deputy can calculate that for himself. From the date mentioned herein, the end of 1959, there was the eighth round increase which was roughly 15 per cent. A 15 per cent increase in pensions would cost £1 million, and we are not doing that.

Mr. Sweetman

Fifteen per cent of the £6 million?

Dr. Ryan

That is right. There is one thing I should like to say, and we will be able to discuss it fully when the Bill comes before the House, before Christmas, I hope. We have put pensions now on a fairly solid basis. The previous increases were a percentage here and a percentage there, but now we have a flat basis in respect of the the pensions applicable around 1st January, 1960, and I feel from this on it will be a simple matter to deal with pensions. It will be a matter of a percentage increase from whatever money is available to us.

Vote put and agreed to.