Perhaps we could have some information as to precisely the amount which will be involved in the Money Resolution under various parts of this Bill. It would be interesting to know, for instance, precisely what is going to be the cost of the new widows' and orphans' non-contributory pensions and also how that is going to be defrayed. It is of particular importance in view of the practice which the Minister has initiated this year of robbing the contributory side of the fund in order to pay the non-contributory pensions which are properly the responsibility of the State. I have put down an amendment, amendment No. 29, which is designed to protect the interests of the contributors under the widows' and orphans' pensions scheme and to ensure that when, as a result of the excess contributions, which they have paid in the earlier years of the scheme, a substantial pensions investment fund is built up that will be regarded as a trustee fund to be used solely for the benefit of those who have built it up by the contributions which have been levied upon them by an Act of the Oireachtas.
I think it is particularly important that we should have some assurance from the Minister for Social Welfare, before this Money Resolution passes, that he will, on the Report Stage of the Bill, introduce an amendment in terms similar to mine. I understand that the Ceann Comhairle is, perhaps, in some doubt as to whether my amendment is in order, but I do not propose to discuss that at this stage, since the amendment is not before the House. I think, however, before passing the Money Resolution, that those who are concerned with the position of the contributors to the pensions fund—and they number over 630,000 persons—should exact from the Minister an undertaking that the State will assume its responsibility regarding non-contributory pensions, and pay the cost of these pensions from the general fund of taxation and that those who are compelled to subscribe to the contributory pensions in order to make provision for their widows and dependents after their death will not be mulcted as they were mulcted this year, in order that the State may escape what are its proper responsibilities. Never in any year since the Widows' and Orphans' Pensions Fund was established has the contributory side of the fund been called upon to defray the non-contributory pensions. In one year, 1945, the amount fixed by the Oireachtas, £450,000, was reduced to £250,000, but there were special circumstances regarding that year, because an examination of the position had disclosed that excess contributions had been made and that the subvention given by the State in earlier years was more than sufficient to defray the full cost of the non-contributory pensions.
Having regard to the fact that this subvention of £450,000 has been paid for over eight years, it was felt that the State in that one particular year could take advantage of the circumstances and be released from its statutory obligations under the Bill, and to reduce it to £250,000, thus evening matters out. That having been done, if the State is going to provide non-contributory pensions, it must and ought in justice defray the cost of the non-contributory pensions out of the general body of taxation. To do anything else, as the Minister for Finance has done this year with the sanction of the Minister for Social Welfare, is, as I have said, to filch the funds properly belonging to the widow and to the orphan which have been built up—and the Minister cannot deny it— from the excess contributions of insured persons in the earlier years.
If any person has any doubt as to the position, I would refer him to the actuary's report, which he will find in the library. That report, in fact, as I have already suggested, should be printed and circulated to Deputies so that they may be aware of what the financial position is. I have detailed that position on the Second Reading of this Bill and I think it is important that Deputies should realise what it is. According to the actuary's report, which deals with the actual financial position from the initiation of the scheme in 1936 to the 31st March, 1943, we find that in 1936, when the scheme had been just initiated, the cost of contributory pensions amounted to £100. The receipts from contributions amounted to £73,400. In the year 1937, contributory pensions cost £27,000 and receipts from contributions amounted to £551,900. In the year 1939, the contributory pensions amounted to £120,900 and the receipts from contributions amounted to £587,000. In the year 1942, the cost of contributory pensions was £255,800 and the receipts from contributions amounted to £614,000. In the year 1943, the contributory pensions cost £297,800 and the receipts from contributions amounted to £605,000. Every year from 1936 until 1943, which was the last year for which the actuary had actual figures at his disposal as distinct from estimates, it is clear that there was a substantial surplus of contributions over expenditure on the contributory side of the account. Of course, that surplus was retained in the Pensions Investment Fund and mounted up until, in 1943, it amounted to something over £3,194,000.
I was told by the Tánaiste in the course of an interruption on the Second Reading of the Bill that that surplus was now over £4,500,000. That £4,500,000, I contend, belongs to the contributors, to the people who have had to pay contributions week after week, and it ought to be retained there and used solely for their use and benefit. It should not be used, as it has been used this year, to defray a liability which properly attaches to the Exchequer.
Let me detail what the position is likely to be in future. The next year to which I direct attention is the year 1951, and for that we have only the actuary's estimate. The actuary estimated that the contribution income in 1951 would be £610,000, and that the total cost of the contributory pensions would be £550,000. Notice that in the year 1951 he estimates that there will be a surplus, but the surplus is estimated to be smaller than it was in earlier years. In the year 1956 the contribution income he estimated would decline to £605,000, but the cost of the contributory pensions would amount to £646,000. That is to say, that in 1956 the cost of the contributory pensions would exceed the contribution income and the difference, of course, would have to be made up in some way. Normally it would be made up of the income from the investments of the Pensions Investment Fund. As I have detailed to the House, this fund was built up over years by the surplus contributions made by contributors under the widows' and orphans' contributory pensions scheme. In the year 1961, where the position becomes fairly stabilised, the contribution income, the actuary estimated, would be £605,000 and the cost of the contributory pensions would have risen to £707,000.
I ought to remind the House that to the actual amount paid out in pensions, namely, £707,000, we ought also to add the cost of administering the scheme, which might be taken, on the basis of the present cost, at £30,000 or £40,000 a year. If we add £30,000 to £707,000, we find that the total cost is £737,000, as against which we have contributions amounting only to £605,000, showing what would appear to be a deficit on the year-to-year working of the scheme of something like £132,000. There would be that deficit, and I contend there will be that deficit if the Minister for Finance and the Minister for Social Welfare are allowed to get away with the precedent that they have tried to set up in this year, the precedent of robbing this Pensions Investment Fund in order to defray a liability which properly attaches to the State. However, that position has not yet been realised and I am hoping that the House will bring such pressure to bear on the Minister for Social Welfare that he will not be allowed to continue the practice which he has started this year and, because he will not be allowed to continue it, that the investments in the Pensions Investment Fund, which belong to the insured contributors, will be properly protected and safeguarded and utilised for their use and benefit. That is the purpose of amendment No. 29 which I have put down to the Bill.
With the income from the fund, which the actuary estimated would bring in £150,000 per year, in 1961 the position would be that if that income is added to the contribution income, the income derived from the contributions of the insured persons, the total income from the investment side of the fund will be £755,000, as against which we may set a total expenditure of £737,000, built up, as I have said, of £707,000, being the actual amount paid out in pensions, and the £30,000 for the administration of this scheme. Therefore, in the year 1961, the fund will just about balance, that is, if the investments which are in the Pensions Investment Fund are permitted to remain in that fund. If, however, they are taken out, and realised, as they must be realised if the non-contributory pensions are going to be made a charge against the fund, there will be no surplus, the fund will not balance and some other Minister for Finance will have to come in and make reparation for the trick which is now being played upon the contributors to the Widows' and Orphans' Pensions Fund. That is what we are anxious to prevent and for that reason I hope the House, before it passes this resolution, will exact an undertaking from the Minister for Social Welfare that he will not continue in other years the practice which he has begun in this; that, on the contrary, he will now approach the Minister for Finance and ask him to do what Ministers under the Administration headed by Deputy de Valera did since this scheme was established, that is, to bear the cost of the non-contributory pensions.
Before I come to deal with another aspect of the matter I should like to bring out the point that in previous years since this fund was established the Fianna Fáil Government bore the cost of the non-contributory pensions on the Exchequer. I had intended to point out that for the first two years of this scheme, in the years 1935 and 1936, the Exchequer contribution to the widows' and orphans' pensions scheme was fixed at £250,000. In the year 1937 the scheme was considerably improved and this Exchequer subvention was raised from £250,000 to £405,000. The reason why that increase was made was that it had become clear in the year 1937 that the cost of the non-contributory pensions was going to be very much more than £250,000 a year and it was felt then that the State had no right to make the cost of those pensions a charge upon the contributors to the scheme and that if, as is being done here, generous pensions are being granted, they should be granted at the cost to the Exchequer and that the workers and the consumers should not be made to pay for them through the pool tax which is being collected under the widows' and orphans' contributory scheme.
Let me give the House the figures, which will substantiate what I said, for the actual cost of the non-contributory pensions over the years 1936 to the year 1946. In the year 1936 the non-contributory pensions cost £37,588—the scheme was only getting under way. Notwithstanding the fact, however, that the non-contributory pensions cost only £37,588, the State paid the subsidy to the Widows' and Orphans' Pension Fund of £256,000. In the year 1937, when the scheme was properly under way, and before the extended benefits had time to operate, the non-contributory pensions cost £254,156, plus the cost of administration. In the year 1938 the actual amount paid out in non-contributory pensions amounted to £380,000, to which, again, we must add the cost of administering the non-contributory scheme. In that connection let me say that the cost of administering that non-contributory scheme is very high, because the non-contributory scheme carries a means test with it and the cost of investigating the means and of satisfying oneself that the applicant is properly entitled by virtue of necessity to a non-contributory pension sends up the cost of administrative expenses. In the year 1939 the actual amount paid out in non-contributory pensions amounted to £457,000; the subvention of the State was £450,000. The cost of administering the non-contributory scheme for that year may be taken to be something about £55,000 or £60,000. £55,000 added to £457,000 makes £512,000, and in that year it is clear that the total cost of the non-contributory scheme was more than £450,000. However, in 1937 the non-contributory pensions scheme had cost £254,000, plus the cost of administration—say £300,000 in all— leaving for the year 1937 a surplus of about £150,000 which more than compensated for the extra expenditure on the non-contributory side of the scheme in the year 1939. In the year 1939 non-contributory pensions had reached a peak and for the succeeding years the cost of these non-contributory pensions began to fall. That is exactly the reverse of what happened in regard to the contributory pensions.
As I have already said, the cost of the contributory pensions began to rise and has been rising ever since this scheme was initiated and will reach perhaps a maximum in the year 1961. On the other hand, the cost of the non-contributory pensions had begun to fall and in 1940 the cost had fallen to £453,000; in 1941, to £447,000; in 1943, to £424,000. In each case—as I have already, I think, emphasised—the cost of administering the schemes has to be added.
Let us see what is going to be the future of the non-contributory schemes. The actuary estimated that in the year 1946—and I have not yet got the figures for that year from the Minister for Social Services——