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Seanad Éireann debate -
Wednesday, 30 Jun 1976

Vol. 84 No. 8

Superannuation and Pensions Bill, 1976: Committee and Final Stages.

Section 1 agreed to.
SECTION 2
Question proposed: "That section 2 stand part of the Bill."

Perhaps, first, I should explain to the Minister that I have referred frequently in the past to the case of the widows in question. Before I go any further I should raise the question of the relevance of this, which is being raised rather by surprise, because the memorandum with this Bill is quite clear on this. It says, in relation to section 2, that:

In the interval between the passing of this Bill and the introduction of a consolidated scheme, a statutory scheme will be made which will provide retrospective cover for both the ex gratia and the contributory widows' and children's scheme. At present the authority for payments under the latter schemes is given by way of approval for the annual Estimate.

It is quite clear that we are giving the Minister powers to make a statutory scheme covering these ex gratia or pre-1968 widows. Therefore I am abundantly relevant.

If the Senator were not, the Chair would have checked him by now.

Even if I should be so allowed by the Chair I do not intend going over the matters I raised already because the Minister has heard these points before. The only point I should like to make again is that I suggested to the Minister for Lands when he was here that he might put it to the Minister for Finance, who is now here, that instead of talking all the time in terms of the cost to the State of £3 million or the cost to the present civil servants of 1¼ per cent of their superannuation, the Minister could get all the parties together and agree on some system of sharing. For example, the State could pay one third or about £1 million, the public servants could pay one-third or 0.4 per cent extra in contributions, which one strongly suspects they would be willing to agree to. Their refusal to pay the 1¼ per cent was based presumably on the point as to why they should pay it all when the State did not take on any of it, but they would agree, perhaps, to pay one-third and the remainder or part of it could come from the widows themselves in paying the contributions that they have expressed themselves as willing to pay.

If the Minister could accept the justice—and he probably does—in equity of the claim of these widows of public servants for whom we all have responsibility, and that theirs is a standard of living which is not one that we ought to accord to them some equitable scheme could be achieved.

The particular approach which I made to the public servants in general left open the possibility of declaration by them that they were disposed to pay part of the cost, but unfortunately there was not expressed a willingness to pay even part of the cost. I hope I am as generous as the next—sometimes I am faulted for my over generosity—but the State is not some strange institution. What means the State has available to it results from the willingness or otherwise of taxpayers to provide the money necessary to provide what we know as ex-gratia widows' pensions equal to those in receipt of contributory widows' pensions which will amount to £3,250,000 as and from the 1st of July next. Several inequities would arise even if taxpayers were to volunteer to accept an addition to their tax bill to meet that.

It would mean that the people who are at present paying towards their contributory pensions would have a sense of grievance that other people were receiving pensions equal to what they were receiving although no contribution had been made by them or by the next of kin towards such pensions. Therefore, we would generate a demand that contributions towards pension schemes be abolished altogether, which would mean a further severe imposition on the general body of taxpayers to provide such pensions.

We cannot escape from the practical rules which must exist in this area and where issues of principle arise, as they do arise here, as to whether contributory pensioners should receive more than non-contributory pensions. If we applied those principles we would have to accept a situation in which those who have not contributed towards their pensions must receive a smaller pension than those who have contributed or who are still contributing and are building up an entitlement by way of an insurance to a pension in future.

Quite significant increases have been given in these pensions in recent years, and as I have pointed out on numerous occasions the cost-of-living index includes many items which I am sure are not in the general pattern of consumption of many pensioners, including expensive spirits and other items which are subject to tax. It can be said that quite substantial increases have been given when you consider that there have been increases in pensions in the public sector far beyond the cost-of-living index. I am not at all unsympathetic, but one has to balance all the conflicting issues which arise in this area. If there was a willingness on the part of certain civil servants to make a contribution it would of course ease the burden which the general body of taxpayers would have to meet. But so far, although we argued on lines similar to those adopted by Senator Yeats, and I would hope with equal effect, we have not yet been successful in persuading the people concerned that they should make a contribution towards the cost of an improvement in the scheme.

The Minister has referred to the question of contributory and non-contributory widows' pensions, and he may well be right that those who were paying contributions might have a grievance if those who had not paid contributions were to get the same pensions. The widows concerned have on a number of occasions said that they are willing to pay the contributions that their husbands were unable to pay because the scheme did not exist at the time of their service, and one can also make the point that the husbands had in fact during their period in the public service paid 3¾ per cent superannuation which they never lived to get. Even taking the Minister's own comparison of the contributory and non-contributory widows' pensions he is not suggesting, I take it, that the non-contributory pension is as little as half that of the contributory. It is very much more than half, and the tendency in recent years has been increasingly to bring one up near the other. I am not sure what the figure is, I would have thought that the non-contributory pension was at least 80 per cent of the contributory. It is much more than 50 per cent.

It is 50 per cent.

When the Minister spoke of the difference I took it he meant ordinary schemes outside the civil service.

The benefit received by ex-gratia pensioners is half that received by those in the other category.

I understood the Minister to speak of the widows' pensions schemes in general under the Social Welfare Acts. I understood him to make that comparison, that as under those Acts the non-contributory was less than the contributory, it should apply in this case.

As a matter of principle whether they are State schemes or otherwise, pensions which are not contributed towards should not be of a level similar to schemes which are contributory.

The general social welfare pensions payable, the non-contributory, are not as little as half the contributory. They are, I think, around 80 per cent or maybe even more of the contributory, and therefore the Minister's own comparison falls down in this case, because you have the situation that the non-contributory widows' pensions, that is, the pre-1968 widows, are half those received by widows whose husbands were fortunate that they lived long enough to be able to contribute. If the Minister were to bring in a new scheme so that the pre-1968 widows would have the same relationship to the post-1968 widows as is in the general social welfare Acts between the non-contributory and contributory, they would probably accept that. I think it would be generally considered to be fair enough. The Minister perhaps has a point in saying that there would be objections.

There would be selfish objections, but I can see that there would be objections on the part of those who, because their husbands had contributed, were getting the full pension if those whose husbands had not been able to contribute were receiving the same pension. Certainly, if the Minister would bring the non-contributory up to 80 per cent, or whatever is the prevailing figure under the Social Welfare Acts, then I think at least some element of justice would be done and he might consider working towards this end and not to be thinking in terms of the £3 million for the doubling of the amount of the lesser figure. Should he go to the civil service associations and ask them to agree to adding, perhaps, one-third of a penny—one-third of 1 per cent— to their superannuation to pay for this, it might well be that he would get agreement.

I should like to help these people. The via media which Senator Yeats has suggested would obviously be of some assistance to the people concerned. We have discussed a number of different arrangements with the body of serving civil servants. So far there has not been a readiness to make a contribution, but we will pursue this matter further and perhaps there will be a readiness. I must at all times make this proviso-that the State finances are not such as to enable the State to expand on many well-deserving schemes which on their own are very difficult to argue against but, cumulatively, yielding to pressure for improvement of various welfare schemes, build up an enormous load which the general body of taxpayers then has to pay. Every time there is movement in one area, pressure builds up for movement in the other and we have to direct State expenditures here towards productive investment which will generate further wealth and the means of creating further wealth. While it can well be argued that one should not ask the less well-off in the community to make sacrifices while this process is undergone, we cannot escape from the realities of economic life. The State's prior attention has to be given for a long time to come towards the productive investment area and the employment-generation area and not in areas of the conferring of benefit unless those who are to receive the benefit make their own contribution towards it.

On the point that Senator Yeats made about the widows themselves contributing towards the cost, I would point out that those who would be in a position to contribute would be the better-off of the ex-gratia widows and those who would be in most need of an improvement would probably, because of their present circumstances, not be in a position to contribute towards the cost. Secondly, it is wrong to say that there is a parallel between a contributory scheme which is related to potential, but has unknown risks, and a scheme of paying compensation for loss which is known already. There is quite a difference, and I am sure Senator Yeats would appreciate that. The two of them are not quite comparable, as I am sure Senator Ryan, if he were here, would understand. I want to assure Senator Yeats and through him, the persons primarily concerned that I am not unsympathetic. I should hope it would be possible to have some progress in this area but frankly I cannot at present see that it would be possible to do so in the near future.

One must accept the Minister's point. Like any Minister for Finance, he has all kinds of claims upon him for spending more money, money which he has not got. This is a particular case, in the sense that it is not a question of spending money on some general scheme for the community as a whole. It is a case where he has a very special responsibility for the widows of public servants who through no fault of their own were not able to contribute to the scheme, though their husbands contributed 3¾ per cent per year during their working lives. The Minister must have regard to the fact that there are these people many of them over 70 and others, 80 or more, who are living in very poor conditions. He ought to try to do something to improve their conditions.

The Minister mentioned that it would be difficult for the poorer widows, the ones we wish to benefit, to pay these 40 years contributions. I understand the widows concerned had come to an arrangement with the Bank of Ireland that, should the scheme come in, the bank would pay the contributions concerned and would take in the pension for such period—about a year and nine months —in order to pay them off with interest and, when that would be regularised, the increased pension would be paid to the widows. I do not think the Minister would need to be worried about the inability of the poorer widows to pay these contributions. That matter could be settled.

Under this section the Minister proposes to create a statutory scheme in the interval between the passing of this Bill and the introduction of a consolidated scheme which will provide retrospective cover for these ex-gratia widows. Up to now the authorisation has been given each year in the Estimates. So he has to make a statutory scheme and this seems to be an opportunity for him to think again about this and see whether he can make even some mild improvements in the course of making this statutory scheme. I would urge him to do so, but I would also like to ask whether these statutory schemes will be made by order and, if so, will the order be laid before each House of the Oireachtas.

The schemes are made by regulation which are duly tabled and may be set aside for 21 sitting days as the Houses decide.

Then we will await the regulation with the greatest interest and take whatever action that seems to be required.

Question put and agreed to.
Sections 3 to 12, inclusive, agreed to.
First and Second Schedules agreed to.
Title agreed to.
Bill received for final consideration and passed.
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