Pensions (Increase) Bill, 1959—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Finance (Dr. Ryan)

The purpose of this Bill is to give statutory force and effect to the pensions increases payable from the Exchequer or other public funds, including the funds of local and harbour authorities, which were announced in the Budget last April.

Under the Bill, pensions which were calculated on the salaries payable prior to the general Civil Service pay increase of 1st November, 1948, are to be increased by 6 per cent., and pensions calculated on the salaries payable during the period after the pay increase of 1st November, 1948, and before the pay increase of 1st November, 1952, are to be increased by 4 per cent. No increase is being given on this occasion to pensioners who retired on or after 1st November, 1952, with full benefit from the higher rates of salary which came into operation on that date. It has been decided that whatever moneys could be made available for pensions increases this year should be applied for the benefit of the older pensioners whose pensions were calculated on pre-November, 1948, and pre-November, 1952, salaries. These pensions are lower than the pensions of their colleagues who retired after 1st November, 1952, and they have accordingly been given priority in the matter of pensions increases.

Because it would be anomalous if a pre-November, 1952, pension were increased above the pension of a colleague who retired with the same rank and service in November, 1952, or subsequently, there is a limitation in this Bill, as there was in the Pensions (Increase) Act, 1956, that no pension may be increased above the pension that would be payable if the pensioner had retired with the same rank and service on 1st November, 1952, with the benefit of the pay increase given on that date. In some cases pensions have already been brought up to the November, 1952, level, or very near it, under previous legislation, and these pensioners will not accordingly be entitled to any further increase or only to a small one. As the limited increases in these cases have been the subject of some comment, I would like to point out that all these pensioners are now getting the same pensions as their colleagues who retired in November, 1952. If the increases payable in some cases are small, it is because these pensioners needed only small increases to bring their pensions up to the November, 1952, level. These pensioners, together with the pensioners who retired in the three years from November, 1952, to October, 1955, now from a group which will be considered as a single class for the purpose of any further increase in pensions. As I have already explained, the moneys available this year have been applied to the relief of pensioners who have not yet reached the November, 1952, level.

In some cases, the pay increases corresponding to the Civil Service pay increases of 1st November, 1948, and 1st November, 1952, were granted on other dates. Provision has been made in the Bill to enable the actual date of the corresponding pay increase to be taken in determining whether a 6 per cent. or a 4 per cent. increase is payable. Accordingly, in referring to the 1st November, 1948, or the 1st November, 1952, I should wish to be taken as referring also to any alternative dates that may be adopted under the Bill.

The classes of pensions to be increased are described in the Schedule to the Bill. Only civil pensions are covered by this Bill; the increases in Army and Military Service Pensions will be covered by separate legislation. Part I of the Schedule to the Bill covers retired Civil Servants, Teachers, Gardaí and other civil pensioners whose pensions were calculated on the remuneration payable before the pay increase of 1st November, 1948, or the appropriate alternative date. These pensions will be increased by 6 per cent. All other pensions covered by Part I of the Schedule to the Pensions (Increase) Act, 1956, and which have not yet been raised to the November. 1952, level will be increased by 4 per cent. subject to the overriding maximum which I have already explained. The increases will be calculated on the existing pensions, including any increases under previous Acts.

The widows and children of Ministers and other holders of parliamentary offices and the widows of Gardaí, etc., are covered by Part II of the Schedule. Local authority pensioners are covered by Part III and harbour authority pensioners by Part IV. Most of the widows' pensions in Part II of the Schedule are payable at basic rates fixed prior to 1948, to which the 1949 and 1956 pensions increases have been added. These fixed rate pensions will all be increased by the 6 per cent. appropriate to pre-November, 1948, pensions, and the new rates will apply to all pensions granted in future, as well as to existing pensions.

Generally, pensions covered by the Bill were calculated on the annual salary payable at the date of the officer's retirement. In a few cases, however, pension was calculated on average salary for the three years preceding retirement. A special provision has been made in Section 7 of the Bill to allow part of the 6 per cent. or 4 per cent. increase to be given in such cases. The increase allowed will be proportionate to the part of the three-year average period which fell before the 1st November, 1948, or the 1st November, 1952, respectively.

Prior to the pay increase of 15th January, 1951, the remuneration of some officers, mainly in the Civil Service, was affected by a restriction known as the "supercut". The supercut originated as a reduction in the cost-of-living bonus on higher Civil Service salaries and it continued over into the consolidated salary rates after 1946 until it was partially restored in 1948 and completely in January, 1951. It had also, of course, affected pensioners who retired before January, 1951, and whose pensions were based on salaries as reduced by the supercut. Under Sections 3 and 4 of the Pensions (Increase) Act, 1956, the pensioners who retired prior to January, 1951, were given either a revision of pension to restore the supercut reduction or the appropriate percentage increase under the Act, whichever was the more favourable. Following representations from the pensioners concerned, these sections have been amended by Section 2 of the present Bill to restore the supercut reduction in all cases and to allow, in addition, the appropriate percentage increases under the 1956 Act and this Bill. Under this provision, the basis of these pensions will now be brought into line with the position of other ranks of the Civil Service whose pensions were based on salaries in which the cost-of-living bonus element was not subject to reduction.

Authority for the appropriate increases in pensions payable from the Exchequer will be found in Sections 3, 4 and 7, while Sections 5 and 6 provide for the increases in pensions payable by local authorities and harbour authorities. These latter 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 in all cases follow the pattern and the conditions of the increases in Exchequer pensions.

Section 10 of the Bill contains various consequential provisions such as, for example, the application to the increased pensions of the statutory provisions which applied to the original pensions. It also 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 noncontributory pension.

The cost to the Exchequer of this Bill is estimated at over £70,000 in a full year. In the current year the cost will be over £38,000. Adding the increases in Army and Military Service Pensions which will be covered by separate legislation, the total cost to the Exchequer of this year's pensions increases will amount to almost £130,000 in a full year.

I commend this Bill to the House for its approval.

Dr. Sheehy Skeffington

I can say only one good thing about this Bill and that is that it is a comprehensive Bill for once. It covers a wide range of State, local Government and harbour authority ex-employees. Having said that, I find it impossible to say anything else in defence of a Bill whose purpose seems to be, having named these various pensioners, to prevent large numbers of them from getting even a brass farthing under the Bill.

In a passage which I quoted the other day on another Bill in relation to the judges and their salary increases, the Taoiseach in the Dáil said that it would be "a dereliction of duty" on the part of the Government not to compensate the Judiciary for a change in money values which had amounted, he estimated, since 1953 to about 15 per cent. As a result of that, it was proposed by the Government—it has since been decided by all of us—to give a 10 per cent. Increase to judges.

We decided earlier on today that, in view of the same circumstances, we would give an increase of nearly 19 per cent. to the Comptroller and Auditor General. These people have now had their salaries increased as from the 1953 level, because it seemed urgent and imperative to the Government, in view of the marked increase in the cost of living which affected these people, as it affected all others, to give them a marked increase, to enable them to cope with the situation as it had changed since 1953. Yet these pensioners to whom the present Bill refers are to get nothing at all more than what they might have hoped to get in 1952!

I find that quite scandalous, and I am prompted to ask the Minister how he dared to come before the House and put these two quite different views. In the case of well-paid public officials the Government holds they must get an increase of 10 to 19 per cent. over the 1953 rate. In the case of past servants who have given equally good service to the country and to the local authorities which employed them, he says: "You shall not get anything more than what would bring your pensions up to the 1952 rate."

Why is it a "dereliction of duty" not to raise by at least 10 per cent. the salaries of the Judiciary and the Comptroller and Auditor General and why is it not also considered to be a dereliction of duty on the part of the Government to say that pensioners shall get nothing over and above what would have enabled them to live at the cost of living of 1952? I feel the Minister must give an answer to that question.

I well remember the Bill brought before us in 1956 which gave an increase of from 6 per cent. to 15 per cent. to various grades of pensioners. I described it as a niggardly Bill. It was a niggardly Bill, but for niggardliness it is completely beaten by the present Bill. The present Tánaiste, who was then Deputy MacEntee, on the 14th of November, 1956, said in the Dáil, apropros of the 1956 Bill, that he had only one criticism of it and that was that it was "meagre indeed".

Of course, the Tánaiste was then in Opposition. Yet the increase given to these people by the Coalition Government, an increase of from 6 per cent. to 15 per cent. for the lowest grades, was regarded by the then Opposition, which is now the Government, as an increase which was meagre indeed. Yet all these people are now mentioned in this Bill as being entitled to no further increase whatsoever. How does the Minister justify that?

Is it that, when in Opposition, the present Government allowed the Tánaiste to criticise the 1956 Bill as meagre indeed but were consciously calling for something which they had no intention of honouring if they had a chance to honour it? How can the Minister explain that by the provisions of this Bill people given that "meagre" increase in 1956 are now explicity precluded from any further increase whatsoever?

In 1956, it was revealed by the then Minister for Finance that something like 1,500 persons were on pensions of less than £100 a year, a very little bit more than the old age pension, which is now about £71. On 10th March, 1959, the Minister told Deputy T. Byrne that 85 Civil Service pensioners were getting less than £50 a year and that something over 730 were getting from £50 to £75 a year, and 227 were getting from £75 to £100, making a total of about 1,000 pensioners now getting, still getting despite the 1956 increases, less than £100 a year pension.

Our hearts were wrung this afternoon by the same Minister on behalf of a public servant now struggling along on £2,400 a year whose salary has consequently to be increased by a further £450 a year. There are about 1,000 retired public servants struggling to live on less than £100 a year pension. It is for us in the strongest terms to cry "Shame", on behalf of those people.

How many people, under Sections 3,4 and 7, are totally deprived of any increase under this Bill? How many pensioners of the various classes referred to in this Bill will, by reason of these sections, be totally deprived of any increase? What number of Civil Service pensioners who will get something under this Bill will suffer deductions by reason of these three sections, Sections 3, 4 and 7? What, in money, will be the approximate total amount saved by such deductions made by reason of the provisions of these three sections?

It was stated in the Dáil a few days ago that by the provisions of this beneficent Bill, some pensioners will get as little as 6d. a month and some as little as 3d a month. I feel that that is nothing less than insulting behaviour towards those retired servants of the State and local authorities. In answer to a question in the Dáil the other day, figures were given of the number of retired civil servants affected by this Bill. I am not quite sure whether that answer, which adds up to a total of about 1,400 people, represents the total number who will get anything under the Bill. How many persons will get anything, even 3d a month under this Bill? Different figures have been quoted in the Dáil, but the position is not quite clear.

The Minister mentioned, not counting further pensions which will be proposed for the Army later, an expenditure figure of about £70,000. On an average, would it be right to say that these pensioners are getting something like from £10 to £50? I do not know; it depends on how many people are involved. What is the average increase?

Now, these pension increases, where there are any, are to be back-dated to 1st August, 1959. The same Minister told us this very afternoon. In the case of an increase of £450 a year, representing 19 per cent., in the salary of the Comptroller and Auditor General that the Government propose to back-date that increase to 1st January, 1959. Why this difference in treatment between the well-paid official now working for the State and the wretchedly-compensated pensioner who formerly worked for the State and is struggling to live on a miserable pension? Why is it considered necessary to back-date increases in judicial salaries and in that of the Comptroller and Auditor General to 1st January, while increases in pensions under this Bill are to be back-dated only to 1st August?

I am shocked and I think many people are shocked—certainly, they would be shocked if they read this Bill—by the amount of ingenuity called upon and expended in an endeavour to complicate the issue almost indefinitely for these unfortunate pensioners, many of whom are living on as little as £70 a year. In this Bill, I see an immense amount of work and, I might almost say, of muscular effort put into the production of the required tightness of fist on the part of the Minister. This is a tight-fisted measure which, having talked at great length about what will be conceded to whom, winds up by giving even to the best-treated only compensation for what might have been theirs in the light of the cost of living of 1952.

This Bill is a disgrace to the country. I feel ashamed of it and all of us ought to feel ashamed of it. I know that, personally, the Minister is a most kind-hearted man. He and the Government must feel shamed by a Bill of this kind, which is taking advantage of the helplessness of these people, because that is what it comes to. The pensioner suffers from one grave disability. He has lost the strike weapon. The pensioner cannot go on strike. Consequently, he is treated as an inferior citizen. If he were still there on the job, if he could fight his corner by threatening strike action, I suggest that such a niggardly and shameful measure would not be brought before us. Since these pensioners have not any weapon, save appeal to public opinion, it is for us here, in their name, to cry "Shame" to the Minister and the Government.

Mr. O'Quigley

Like Senator Sheehy Skeffington, I am thoroughly disappointed at the provision made in this Bill for retired employees who were formerly paid out of public funds and whose pensions are now paid out of public funds. Reading the Bill has made me indignant. I fully feel the sense of indignation and shame that Senator Sheehy Skeffington has expressed in relation to some people who will be offered as little as sixpence a month or in some cases threepence a month. It is an outrageous insult to those people to proffer them such an amount.

The position is worse as far as the people who retired since 1952 are concerned. As I understand the position and as appears to have been stated by the Minister for External Affairs in the Dáil, no increase in respect of people who retired since 1952 will be paid under this Bill. I have here the Irish Statistical Survey, on page 34 of which is a table showing the price index numbers, and for the year 1952 the price index to base 1953, 100. is 95, and in 1958 it is 116.6 which I estimate to be an increase in the consumer price index of 22 per cent. What this Bill means, if I understand it correctly, is that, although there has been an increase in the cost of living of 22 per cent. since the 1st November, 1952, the people who retired since that date are to get nothing whatever under this Bill.

If you take the increase in the cost of living since 1956 when the last increase was given, the index figure in 1956 was 107.2 and in 1958 it was 116.6, which is an increase of nine per cent. We have had in 1958 a round of wage increases for salaried and wage-earning classes and all of these, or the vast majority of them, got a minimum of 10/- a week. The second round of wage increases stemming from the increase in the cost of living brought about by the 1957 Budget and other circumstances is under way and has almost concluded.

I cannot understand how there can be any justification for denying people an increase in pensions having regard to the nine per cent. increase in the cost of living that has taken place since 1956 when pensions were last increased. It is no case to say that some of the people who retired were given certain percentage increases in their salaries before they retired. There are people who just missed those increases and they will be caught out under this Bill. It is a shameful and scandalous state of affairs that people who are now in their seventies, perhaps some of them up to 80 years of age, should get such a poor showing from the State to whom they rendered such splendid service in their time. As Senator Sheehy Skeffington said, they have no potential at the ballot box because of decreasing numbers, through death, and they have no strength to enforce their demands.

I notice that the Bill is making provision in Section 2 for giving retrospective effect to the abolition of the super-cut in respect of certain grades of civil servants to whom the super-cut as defined by the Minister, applied at the time they went on pension. That reference brought to my mind the position of teachers. There was a revision of salaries in 1946 and there was a lump sum payable as part of the new arrangement for national school teachers. One-third of that lump sum was paid by the inter-Party Government between 1948 and 1951; another third was paid by the Fianna Fáil Government between 1951 and 1954. If my recollection is correct, there still remains a balance of one-third that has never been paid in respect of these people. It was always argued that people who did not fall on the right side of the date line, happened to be unlucky, but it does seem that once the Minister can give retrospective effect to the abolition of the super-cut and thereby benefit the pensions of higher paid civil servants, there is every justification at this stage for paying to teachers that one-third of the lump sum paid to people who retired after the 1946 salary arrangement in respect of national teachers. That is 13 years ago. There are very few of them left by now, I should imagine, but even those few should, in their declining years, at least get that recognition of their service to the State.

The pensions of many people would not be increased very substantially even at the rate of four per cent. or six per cent. under this Bill. I should have thought that, when provision was being made for an increase in pension, a substantially larger increase would be payable in respect of those who are on the lower rates of pension. That would be necessary in order to meet the hardships which these people have undoubtedly suffered by reason of the increase in the price of food as a result of the abolition of the food subsidies. I do not want to reopen a discussion on the 1957 Budget but there can be no doubt that these people did suffer considerable hardships as a result of that Budget. The Minister probably takes the view that that was inevitable but he ought to make the same recompense to those people as has been made to people who were in employment, on account of these increases in living costs.

Senator Sheehy Skeffington has made the point very well that if an increase of ten per cent. could be back-dated to the 1st January in respect of the Comptroller and Auditor General and the judges, then those increases in respect of the rise in the cost of living which resulted from the Budget of 1957 ought to be back-dated to a much earlier date than the 1st August, 1959. The Minister for Justice stated in the Dáil that the reason for back-dating the judges' increase to the 1st January, 1959, was that the judges had applied for an increase in salary around 1957 and that by reason of certain circumstances which arose, through no fault on the Minister's part, that was held up until this year. The great bulk of the increase in the cost of living has been caused by the changes made in 1957 and the Minister might well have made retrospective to the 1st January, 1957, the increases to be granted under this Bill.

Mr. L'Estrange

This Bill is a mockery. It should be withdrawn and a measure introduced that would at least do justice to those people who have given long and loyal service to this State. The Bill provides increases of six per cent. for those pensioners who retired before the 1st November, 1948, four per cent. for those who retired before the 1st November, 1952 and nothing for those who retired since 1952. It does that despite the fact that the cost of living has increased, is increasing daily and now stands at an all-time record of 147 points. In reply to a question in the Dáil last week, it was stated that over 180 articles out of roughly 190 had increased in price in the last few years. We also know that money is losing value. Those people were at least entitled to an increase of 15 per cent., 20 per cent. or 25 per cent.

By deliberate Budgetary action in 1957, the Government inflicted hardship on those pensioners unable to fend for themselves. That Budget alone increased the cost of living by over 12 per cent. When a Government takes such action it is up to that Government to adjust as quickly as possible the pensions of those people. As Senator O'Quigley and Senator Sheehy Skeffington stated, those people are at least entitled to have their pension increases back-dated to the 1st January, 1959. If we are prepared to do it for those in well-paid positions, surely those living on pensions of from £2 a week upwards are entitled to the same recognition from the State?

It was on Budget day this year that the people got the first indication from the Minister for Finance that it was proposed to introduce a Pensions Bill during the year 1959 to cushion them against the increases brought about in the Budget. High hopes were raised in the minds of all pensioners. They were again raised only a month or so ago when the pensioners saw that district justices and judges were to get increases of from £3 10s. per week to £10 per week, increases, as a matter of fact, from £175 per annum to £385 per annum. It is only natural to expect that pensioners living on £2 or £3 per week would say: "If the State can give those increases to people with good jobs, surely they will give us something worthwhile in this new Bill?" Now we have the Bill. The Fianna Fáil mountain has been labouring for the last five months and has produced a mouse. Some people are to get increases of 6d. per month, which is 1½d. per week; others are to get 3d. per month, which is something like ¾d. per week.

Mr. Donegan

Less.

Mr. L'Estrange

It may be a little less; that is as near as I can get to it. I am not in favour of giving the same percentage increases to all sections. If you give a four per cent. increase to a man with £100 a year, you are giving him a total pension of a little less than £2 per week; if you give it to a man with £500 a year, he will get roughly £10 per week.

The 1957 Budget increased the price of the loaf from 9d. to 1/2, an increase of 5d.; and the price of butter from 3/9 to 4/4, an increase of 7d. If a pensioner had to use six loaves in a week and 2 lbs. of butter, it would mean an increase for him of almost 4/- per week. The Minister has not gone the full way to meet those people. We all know that when the cost of living increases it pinches hardest the people in the lower income group and the man with the small pension. The man with the pension of £2 or £3 per week has to try and exist on bread, butter and tea. The man with £7 or £10 per week has his choice of foods. The man on the small pension is definitely hardest hit and he is getting very little relief in this Bill.

The 1950 Act gave increases ranging from as high as 50 per cent. to those in the lower income group down to increases of 20 per cent. for pensioners in the higher category with over £400 per annum. The 1956 Act was very much criticised at the time by the people then in Opposition but now in Government. In that Act we find that a 15 per cent. increase was given to pensioners with under £120 per annum, a 12 per cent. increase to those with from £120 to £150 per annum and a nine per cent. increase to those with from £200 to £300 and over per annum. The Government should have followed the good example set by the inter party Government and given greater increases to those who are at the bottom of the ladder and who need the money badly.

As I said, the cost of living now stands at an all-time record of 147 points. In March, 1957, it stood at 135 points. The Budget of that year increased it by 12 points. In 1956, when the last increase was given to those pensioners, the cost of living stood at 132 points. It is now at 147 points, that is, an increase of 15 points since those people got the last increase. In other words, there is an increase in the cost of living of almost 12½ per cent. Crocodile tears were shed by many people here the last day because we were not able to give the judges the full increase of 15 per cent. and it was pointed out that the cost of living had increased by 15 per cent. since 1952. Surely the people who shed those crocodile tears about the judges should have seen to it that the unfortunate pensioners at least got a reasonable increase?

When the Taoiseach spoke in the Dáil about judges' salaries, he said they should get a salary to put them in a position in which they would be as far as possible immune from improper influence of any kind. The Taoiseach and the Government should have given these pensioners an increase to keep them as far as possible immune from hunger and want. They are not getting such increase in this Bill.

A nation is very often judged by the way in which it treats the old, the destitute and pensioners. If we are judged by that yardstick abroad, some nations will think very little of us. Indeed, we are not living up to the promises made by the Taoiseach at the recent debate at Oxford that our social services would be increased and put on the same level as the social services in England and Northern Ireland.

Tomás Ó Maoláin

He did not.

Mr. L'Estrange

Yes, he did. That is what he said. It was reported in the Irish Press. It was so that we would do away with the Border. There is a very big border in this country when one man who has £4,885 is given an increase of £10 a week and another man who may not have £2 a week to exist on is given an increase of three farthings a week.

Tomás Ó Maoláin

He did not.

Mr. L'Estrange

That is the gist of his whole speech.

An Leas-Chathaoirleach

It is not relevant to this Bill.

Mr. L'Estrange

If the Irish Press cannot convert the Senator, certainly I cannot convert him and I shall not try.

Tomás Ó Maoláin

He did not.

Mr. Burke

The Irish Press is not in this Bill.

An Leas-Chathaoirleach

It is not relevant to this Bill.

Mr. Donegan

Tell us something he did say in his time.

Mr. L'Estrange

In 1950, the increase given cost £200,000. In 1956, the increase cost the Exchequer £120,000. This year, they are getting about £70,000, which is only roughly one-half of what they got in 1956, and one-third of what they got in 1950. Yet, the people who were then in Opposition and who are now in Government lamented the fact that these people were not getting enough. It might be no harm to quote the Tánaiste in November, 1956, as reported at column 960 of the Official Report, Volume 160:

It is a Bill, in fact, to mitigate the hardship to which the continuing upward trend in prices has subjected many hapless people, most of them incapable of serious work, who were retired on pension in days when circumstances were easier and who had been looking forward to comfortable security in their old age. It cannot be denied that the hardship exists and that in the majority of cases it is severe. Accordingly... we are not opposing the Bill....

Indeed, the one criticism I have heard of the reliefs to be granted under the Bill is that, so far as the smaller pensions are concerned, they are meagre indeed.

Yet, at that time they were getting a 50 per cent. increase and that was described as "meagre indeed". Now they are getting a four to six per cent. increase and, of course, it is regarded as sufficient. The hardships still exist; there has been an increase in the cost of living and I am surprised that the man who uttered those words only a few years ago could not ensure that justice was done to these people in this Bill. Even though these pensioners may not have much political power, the nation owes them a great deal and more and better provision should have been made for them in this Bill.

Seanad Éireann debate - Wednesday, 16 Dec 1959