Dáil Éireann debate -
Thursday, 9 Dec 1976

Vol. 295 No. 3

Vote 20: Superannuation and Retired Allowances.

Minister for Finance (Mr. R. Ryan)

I move:

That a supplementary sum not exceeding £950,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1976, for pensions, superannuation, compensation (including workmen's compensation), and additional and other allowances and gratuities under the Superannuation Acts, 1834 to 1963, and sundry other statues; extra-statutory pensions, allowances and gratuities awarded by the Minister for the Public Service; fees to medical referees and occasional fees to doctors; compensation and other payments in respect of personal injuries; etc.

The main Estimate for superannuation and retired allowances for the financial year ending on 31st December, 1976, for a nett sum of £9,100,000. The Supplementary Estimate now being introduced is for an additional sum of £950,000. The further expenditure arises mainly because of, first, an increase in the number of retirements, especially of persons retiring voluntarily between the ages of 60 and 65; secondly, an increase in the number of married women retiring who are qualified for updated marriage gratuities; thirdly, an increase in the number of retirements under the non-established pension scheme following the announcement in the middle of the year that the retirement age was being reduced from 70 to 67 years; and because, fourthly, no provision was made in the original Estimate to cover expenditure arising from the pay increases on 1st August, 1976, under the interim national pay agreement. The Estimate was prepared, as the House will understand, at the end of the year 1975, and the 1st August, 1976, increase could not have been foreseen then.

Mr. Colley

The Minister referred to an updated marriage allowance. Could he indicate in a little more detail what he had in mind?

Mr. R. Ryan

The position in relation to the marriage allowance is that those becoming entitled to it have up to two years after marriage in which to decide whether to resign and take the marriage gratuity. The value of the gratuity is based upon their earnings at the time of exercising the option, which means that if there are increases during that two-year period the gratuity they receive is correspondingly greater.

Mr. Colley

I would like to take this opportunity to refer briefly once again to the situation of the pre-1968 civil service widows. The Minister is, I know, very familiar with that situation. Could he indicate whether any further consideration has been given to this problem having regard to two things: (1) that the numbers involved, of necessity, have been reduced in the past few years; and (2) that there was a proposition being put to the effect that those who would participate would buy their way into the scheme? I understand that arrangements have been made to enable them to borrow the necessary money from the bank. Could the Minister say whether it would be feasible at this stage to do that and whether their buying their way in, as distinct from simply having the scheme extended to them, and the reduction in numbers would have a worth-while effect from the actuarial point of view on the cost which was estimated originally in the actuarial report which I had commissioned and which the present Minister received.

I believe that the people concerned are very deserving of the best consideration we can give them. They have a sense of grievance. That sense of grievance is heightened by various cases to which they can refer occurring after 1968 in which, in effect, the widow of a civil servant was given an option. I know there are explanations for this which make the situation different from what it appears in most cases anyway. Nevertheless, I can see quite clearly that the bulk of these people feel they are being discriminated against and that certain individuals have been fortunate enough to get the kind of rights they have been seeking for quite a number of years. I believe an effort should be made to devise a way of extending the full pension scheme to the widows in question. It should be possible, having regard to the diminishing numbers, as I said, and the assessment of the cost of their doing so and buying their way in, to reduce the cost to the Exchequer. However, in the main, what I want to know is whether further consideration has been given to this whole problem since the matter was last referred to in the House and, if so, with what result.

Mr. R. Ryan

The actuarial survey of the widows' and children's scheme to which Deputy Colley referred was commissioned to ascertain the cost of conceding the claim and also to determine the adequacy of the existing rates of contribution to the scheme. That report showed that the capital cost as at 31st December, 1972, of bringing existing and future ex gratia pensioners of the civil service alone up to the level of the contributory pension was £7,353,000. This could have been met by increasing the existing contribution rate from 1½ per cent of pay to 2¾ per cent. The staff associations were invited to participate in making such a contribution but they refused to do so.

In terms of the current annual rate of expenditure on ex gratia pensions in the public service as a whole, including the civil service, doubling the rate of ex gratia pensions as requested would entail an extra annual charge of £3 million. In addition, if it were granted it could stimulate claims by other groups for compensatory concessions. For example, members of the contributory scheme might seek a reduction in their contributions or, indeed, the abolition of their contributions because they would see little point in making contributions towards a pension when other people could get equal benefits without making a contribution. Therefore while one has every sympathy with individuals whose personal family fortunes could be affected by not having as great a pension as others, one has to bear in mind the very serious consequences which would be likely to arise if the ex gratia payments were to be as generous as those to which other people contributed. Quite clearly no decision can be taken in relation to this matter except in the overall budgetary situation, and therefore it would not be appropriate for me to anticipate what the budget might or might not contain or what future change, if any, might be made in the non-contributory scheme.

Mr. Colley

I think the Minister said the actuarial report was commissioned to determine the cost of existing and future ex gratia payments.

Mr. R. Ryan

The adequacy of the existing rates of contribution for bringing existing and future ex gratia pensions up to the level of contributory pensions.

Mr. Colley

The question I want to ask the Minister is how can ex gratia pensions of the kind we are talking about arise in future?

Mr. R. Ryan

In respect of a civil servant who died prior to 1968, if such a person died leaving a widow, then such a widow would become an ex gratia pensioner.

Mr. Colley

If he died——

Mr. Ryan

Now.

Mr. Colley

This would be somebody who had retired before 1968 and had not had the option——

Mr. R. Ryan

Yes.

Mr. Colley

Or possibly had exercised the option the wrong way?

Mr. R. Ryan

The person who exercised the option, whether right or wrong, in the way to which Deputy Colley referred, would be out. The person who had the opportunity to exercise the option is denied the benefit by reason of exercising it. The ex gratia pension is available to those who have not had the right to exercise it.

Vote put and agreed to.