The pension increases which I announced in this year's Budget are given statutory force and effect by this Bill, which contains the detailed legislative provisions to regulate the grant and payment of the increases.
The pensions to be increased under the Bill, namely, civil pensions payable from the Exchequer or from other public funds, including the funds of local authorities, are described in the Schedule to the Bill. Parts I and II of the Schedule contain pensions payable from the Exchequer and from certain statutory funds to retired civil servants, teachers, etc., to members of the judiciary and to the widows and children of former Ministers and holders of parliamentary offices. Parts III and IV of the Schedule specify the pensions payable to former employees of local authorities and harbour authorities.
These pensions will be increased under the provisions of Section 2 of the Bill by sums ranging from 15 per cent. on pensions under £100 a year to 6 per cent. on pensions over £450 a year. With a few exceptions, to which I shall refer presently, the increases are payable only where the service in respect of which the pension was granted ended before the effective date of the 1952 pay increases. These pay increases were granted to most classes with effect from 1st November, 1952; where this is not the case, the appropriate date in 1952-53 is prescribed or can be determined under the Bill. This alternative date will in no case be later than the 6th April, 1953. In referring to the 1st November, 1952, therefore, I should like to be understood as referring equally to the alternative date prescribed or determined under the Bill for a particular class or classes.
An exception to this rule is made for pensions payable at fixed rates which were not altered or affected by the 1952 pay increases. Most of the pensions to widows and children which are listed in Part II of the Schedule to the Bill are of this type. In such cases the appropriate increase under the Bill will be added to all pensions, including pensions to be granted in future, thus operating as a general revision of the existing rates of pensions which were fixed prior to 1952. A second exception is made for cases where, although retirement took place after the 1st November, 1952, the pension was calculated on average salary over a three-year period which began before the 1st November, 1952, and was, therefore, derived partly from receipts at the lower salary rates in force prior to that date. Under Section 7 of the Bill a modified increase proportionate to that part of the three years which fell before the 1st November, 1952, is allowed in such cases. Parts III and IV of the Schedule to the Bill will permit of a similar concession to local authority and harbour authority pensioners.
As no pension calculated wholly on the increased rates of salary introduced on 1st November, 1952, may be increased under the Bill, so no pension may be increased beyond the amount which would be payable to a colleague of identical rank and service who retired on the 1st November, 1952, and whose pension was calculated wholly by reference to the higher salary rates introduced on that date. Provision for this overriding maximum has accordingly been made in Sections 3, 4 and 7 of the Bill.
Prior to 1951, the remuneration of the higher posts in the Civil Service, and of some higher posts elsewhere, was affected by a restriction known as the super-cut, which originated in 1921 as a reduction in the cost-of-living bonus on the higher Civil Service salaries. The effects of the super-cut persisted in the consolidated salary rates which replaced the former system of basic salary and bonus from 1946 onwards until it was removed partially in 1948 and completely in January, 1951.
Officers who retired while the super-cut was in force are, however, still in receipt of pensions based on the lower salaries. When this Bill was in course of preparation, it was found that a revision of these pensions to remove the effects of the supercut would not cost appreciably more than the grant of the appropriate percentage increases under the Bill. I decided, therefore, in view of the representations which had been made from time to time by and on behalf of these pensioners, to allow them to take their pension increase either in the form of a remission of the supercut reduction, or the appropriate percentage increase, whichever is more favourable. Provision has been made accordingly in sub-section (4) of Section 3 of the Bill.
Other sections of the Bill provide for the treatment of double pensions and for the application to the pension as increased of any statutory provisions applicable to the original pension. Sub-section (5) of Section 10 provides that any increase under the Bill shall not be assessed as means for the purpose of an old age pension or a widow's non-contributory pension. Section 8 provides that the increases shall be payable on and from the 1st August, 1956, or from the date on which the pension itself commenced if this is later. Payment of the increases to Exchequer pensioners has already commenced under the authority of a Supplementary Estimate passed by Dáil Éireann.
Sections 5 and 6 empower local authorities and harbour authorities to increase the pensions payable by them subject to ministerial approval. The increases allowed will be similar in amount and will be generally subject to the conditions and limitations governing increases in Exchequer pensions. The total cost of the Bill to the Exchequer is estimated at £140,000 in a full year. Increases in Army pensions and Army retired pay, for which separate legislation is being prepared, will bring the total cost to the Exchequer of pension increases up to the Budget provision of £180,000 a year.
I commend this Bill to the House for its approval.