Dáil Éireann Debate, Wednesday - 28 June 2023
32. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Defence if clarification will be provided in relation to the deduction of €304 from monthly pension pay in the case of a person (details supplied); if a review will be undertaken to establish the appropriate amount of monthly pension to be paid in this case; and if he will make a statement on the matter. [31484/23]
View answerThe person in question served in the Defence Forces from 1979 to 1985 before being discharged “Below Army Physical Standards”. His service of 6 years was below the minimum length of service required to qualify for an occupational/service pension; however, a Short Service Gratuity was paid in 1985.
The person in question separately applied for a Disability Pension under the Army Pensions Acts. In April 1986, he was awarded a disability pension to the value of €4,071 (£3,206) per year. The current rate of his disability pension is €14,945 a year.
The person in question also instituted civil proceedings in respect of the same injury and in July 1986 the High Court awarded him compensation of €37,457 (£29,500). His Disability Pension was therefore reviewed by the Minister for Defence in accordance with the provisions of Section 13(2) of the Army Pensions Act, 1923 (as amended). Section 13(2) provides:-
“Any compensation which may be received from or on behalf of the person alleged to be responsible for the act which caused the wounding….. may be taken into consideration in fixing the amount of any pension, allowance or gratuity which might be awarded under this Act to or in respect of such person and if such compensation is received after the award of any such pension or allowance the Minister may review the award and, having regard to the amount of such compensation, either terminate or reduce the amount thereof”
The underlying objective of section 13(2) is to take into consideration compensation paid ‘on the double’ for the same disablement.
Under the provisions of Section 13(2) the then Minister for Defence decided, in March 1987, to reduce the Disability Pension in question by the annuity value (as assessed by an Actuary) of the total civil compensation received. The annuity value was assessed at €3,648 (£2,873) a year. The person in question applied to the High Court for a judicial review of the Minister’s decision to reduce his pension. The High Court decided that he had not been given adequate opportunity to present his case before the decision to reduce the disability pension was made. The Court quashed the decision to reduce the disability pension and ordered that the matter be considered anew. The Court did not express any view as to the outcome of the review to be made. The Department consented to the High Court’s decision and an Order to this effect was made on 23 November 1987. The Order did not preclude the then Minister for Defence from arriving at the same decision made previously.
A fresh review of the Disability Pension was undertaken and all aspects of the case, including, in particular, representations made by his solicitors, were fully considered. In March 1988 the Minister decided to take into account all of the civil compensation received by him and to reduce the disability pension by the assessed annuity value of that compensation. The reduction took place from 1 April 1988, two years after the date of discharge and after payment of the pension had commenced.
As the annuity value was assessed at €3,648 (£2,873) a year the effect of the decision under Section 13(2) is to reduce the rate of Disability Pension payable from €14,945 to €11,297 a year at the current rates payable. The annual deduction of €3,648 equates to a monthly deduction of €304.
It should be noted that whilst the annual deduction has remained fixed at €3,648 per annum since 1988, the annual value of the Disability Pension has increased over time from €4,071 (£3,206) in 1986 to a current value of €14,945. In addition, Defence Forces’ disability pensions are not subject to Income Tax.
In order to provide more information to pensioners the payslip now shows the gross pension amount and the deduction amount rather than just the net amount for payment as was previously the case. The reference to “Annuity – NCOs Non Taxable” relates to the paycode applied to deduct the annuity value, as assessed by an actuary, from the Disability Pension in line with Section 13 (2) regulations. The word “NCO” refers in this case to a cohort of pensioners other than Officers. This includes the rank of Airman.
An annuity value can be applied as a deduction. In this case, the word “Annuity” indicates that this amount, assessed by an actuary, is the amount which needs to be deducted from a pensioner on a Disability Pension who has already received compensation for the same injury.
In summary, the appropriate amount of monthly pension is being paid in this case.
