I move that the Bill be now read a Second Time.
The purpose of this Bill is to give statutory authority for the pensions increases granted in 1962 and 1963 to various public service pensioners. The pensions covered by the Bill are civil pensions payable from the Exchequer and from other public funds, including pensions paid by local authorities and harbour authorities, as well as pensions paid by various statutory bodies. Separate legislation will be enacted to authorise similar increases in Army retired pay, disability pensions, special allowances and military service pensions. The increases in Exchequer pensions, both civil and military, are already being paid in most cases under the authority of Additional Estimates passed by this House on 18th July, 1962, and 28th November, 1963.
The provision of the Bill are explained in detail in the White Paper circulated with the text. The most notable feature of the Bill is the new basis adopted for the pensions increases of 1962 and 1963. Previous pensions increases had consisted of percentage additions which varied with the amount of the pension or the date of the pensioners' retirement, so as to provide a larger increase in the smaller pensions or for the longest retired pensioners. The 1962 and 1963 increases operated to bring all pensions currently payable to persons who retired before a certain date, up to a common level fixed in relation to post-retirement pay. The 1962 increases raised pensions to 1955 pay level, and added a further 6 per cent to these pensions and to pensions granted before the general pay increase of 1969, which became operative for the Civil Service on 15th December, 1959, and for other services in December, 1959, or in the early months of 1960.
The 1963 increases advanced pensions further, to 1959 pay level, so that all pensioners who retired before the dates in 1969-60 when the 1959 pay increases became operative have now been brought up to 1959 level. The resulting benefit was, of course, greatest for the longest retired pensioners. In the case of the older pensioners, some of whom had retired before 1939, the 1962 and 1963 increases have meant a substantial addition to their pensions over and above the increases already granted to them under the four earlier Pensions (Increase) Acts, 1950 to 1960.
The large-scale revision of pensions to the post-retirement pay level of 1959 was a more costly operation than any pensions increase previously granted. The estimated total annual cost to the Exchequer of the 1962 increases is £820,000 with a further £320,000 for the 1963 increases. Even allowing for some savings on the 1962 figure on account of deaths since August, 1962, the annual cost of the 1962 and 1963 pensions increases at the present time is estimated to be of the order of £1.1 million. The estimated annual cost to the Exchequer of earlier pensions increases was £212,000 for the 1960 increases, £130,000 in 1959 and £180,000 in 1956. The estimated annual cost of the increases granted in 1949 was £240,000.
The number of Exchequer pensions covered by this Bill for the 1962 increases is 10,106 divided into the following categories: 2,709 Civil Service pensioners at an annual cost of £121,000; 2,956 national teachers— annual cost, £195,000; 4,017 Garda pensioners (including widows and children)—annual cost, £122,000; 424 RIC and miscellaneous—annual cost, £24,000.
The total annual cost of increases in these pensions is £462,000 to which must be added approximately £42,000 for recoupment of the Exchequer share of the 1962 increases in local authority pensions, making a total of £504,000 for the estimated annual cost to the Exchequer of the 1962 increases under this Bill. The 1963 increases payable under the Bill are estimated to cost a further £211,000 in a full year, of which £48,000 is for Civil Service pensioners, £60,000 for national teachers, £79,000 for the Garda pensioners and £9,000 for RIC and other small groups of pensioners; the remaining £15,000 is for recoupments to local authorities.
Increases in Army and military service pensions, retired pay and special allowances, which will be covered by separate legislation, will bring the cost to the Exchequer in a full year up to the figures of £820,000 and £320,000 already mentioned.
Another provision in the Bill which I should mention specially is section 29, under which future increases in civil pensions of the type covered in the Bill may be authorised by statutory regulations made by the Minister for Finance and laid before each House of the Oireachtas. This provision will relieve the House of the necessity of passing an Act to validate every new pensions increase. It will not, however, lighten the work of the Minister for Finance, who will always have the task of co-ordinating the many proposals for expenditure urged upon him in this House and elsewhere with the revenue available to him. In this situation, the Minister for Finance must hold a balance between the various sectors of the community so that the incidence of taxation and the distribution of benefits will tend to be fair and reasonable.
Over the past two years, a substantial allocation has been made from the Exchequer to public service pensioners. The needs of pensioners will continue to be sympathetically considered and I hope that it will be possible to effect further improvements in their position from time to time. Their claims, however, will have to be considered in relation to the overall pattern of financial and economic development which must ultimately determine the benefits that can be provided for every class in the community, including pensioners.
I commend this Bill to the approval of the House.