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Dáil Éireann díospóireacht -
Thursday, 20 May 1965

Vol. 215 No. 13

Committee on Finance. - Pensions (Abatement) Bill, 1965: Second Stage.

I move that the Bill be now read a Second Time.

The explanatory memorandum circulated with this Bill shows that it is concerned with the abatement of public service pensions where the pensioner is re-employed in the public service. The Bill deals only with pensions which are subject to abatement by statutory provision. Thus it deals with civil servants' pensions which are governed by the Superannuation Acts, with pensions under the Local Government (Superannuation) Acts, and with the pensions of members of some semi-State Boards, Ministers, Parliamentary Secretaries and the President. Where provisions for abatement in pension schemes can be amended by regulation or otherwise without recourse to legislation, they are not dealt with in this Bill, but it is intended that when the Bill has been enacted, these provisions will then be dealt with by way of statutory instrument.

At present the normal abatement provision ensures that, when a public service pensioner is re-employed anywhere in the public service, his pension is reduced by any sum by which the total of his annual salary on re-employment plus his pension exceeds the annual salary which he had on retirement from the position in respect of which his pension was awarded. However, if the pensioner's services are sufficiently valuable to enable him to secure employment outside the public service, his pension is not abated. I am of the opinion that, if the pensioner can similarly obtain employment in a sector of the public service other than that from which he retired, this constitutes prima facie evidence that his services are valuable and competitive and that he should be paid in full for the job as though he had secured employment outside the public service. Abatement of the pension which had accrued to him for his previous service effectively reduces the full pay for the job. On the other hand, where a pensioner is re-employed in the same service as that in which he spent his career, it may not be because his services meet the above conditions. For example, many civil service pensioners are re-employed on the grounds of hardship and it would not be appropriate to pay pension in addition to salary in such cases. In these cases it is a condition of re-employment that payment of the pension will not commence until the re-employment ends. The Bill, accordingly, provides that where a public service pensioner is re-employed in any employment other than that from which he retired, even though this employment is in the public service, his pension will not be abated, but where he is re-employed in the same service as that from which he retired, his pension will continue to be subject to abatement, but of a milder kind.

The Bill makes one exception to the principle that abatement should continue to apply to re-employment in the same service. This is where it is in the public interest to re-employ the pensioner in that service. Stringent conditions are prescribed by the Bill to ensure that this exception will be applied only in genuine instances where it is in the public interest to re-employ the pensioner and that it will not be exploited by persons desiring to secure both salary and pension at the same time in their own interest.

Under the Conciliation and Arbitration Agreement made with the Civil Service Staff side, consultations took place in January last with representatives of the Staff Side of the General Council on the heads of the Bill which dealt with Civil Service pensions. These representatives suggested a number of changes which were accepted. The most important of these was that where a pension must continue to be abated under the Bill, abatement should take place, not by reference to the salary on retirement from the pensionable position, but by reference to the salary currently payable in respect of that position. The acceptance of this suggestion will remove the anomaly whereby a person might receive a salary increase while re-employed only to find that his pension was reduced by the same amount because, at present, the total of salary and pension cannot exceed salary on retirement from the pensionable post. The present provision was held to be justified on the grounds that to abate a re-employed person's pension by reference to the current salary of the position from which he retired would be to treat him as though he had not retired at all. For instance, he would benefit from increases in the pay of his former grade, even if the increases were in respect of the introduction of higher duties or some other factor which did not affect him. Neither provision is thus free from anomalies but I am satisfied that the proposed amendment, which will be an easement of the position of individuals, is the more desirable of the two. Consideration of this amendment and the drafting of the necessary provisions, which are rather complex, delayed the circulation of the Bill to the present session.

I have given some thought to the question of making the Bill retrospective. This point was raised by Deputy James Tully in the course of the debate on the Vote on Account on 16th February, 1965. The Bill was introduced in the last Dáil in December, 1964, and as it was originally intended to have it enacted in the last session, I think it would be reasonable to make it retrospective to 1st January, 1965.

I recommend the Bill to the House for its approval.

I am glad to learn from the Minister's remarks—I had a note here to refer to it myself— that it is proposed to make this Bill retrospective. I am not certain that the retrospection goes back far enough. So far as I can gather, there is some disappointment at the terms of this measure on the part of certain categories and it may be that it will be possible to effect an amendment by amending, as the Minister has said, certain schemes. One of the categories of persons affected by the abatement, who suffer a long-felt sense of grievance, as well as civil service personnel, is that of ex-Army officers. Under the 1937 Defence Forces Pensions Scheme certain provisions take effect which mean that an officer's pay and pension are reduced. Article 15 reads:

Where an officer in receipt of retired pay is appointed to any office the remuneration of which is payable out of public moneys whether provided by the Oireachtas or out of the Central Fund or by means of poor rate or any other rate imposed by a local authority, the following provisions shall, while he is in receipt of such remuneration, have effect;

(a) if the amount of such remuneration equals or exceeds the pay of such officer immediately prior to his retirement then such retired pay shall not be payable to such officer;

(b) if the amount of such remuneration is less than the said pay then so much only of such retired pay as will, when added to such remuneration, not exceed the said pay shall be paid to such officer.

The effect of that has operated very harshly in the case of retired Army officers. Indeed, I believe it has had certain consequences to which it may be no harm to advert. There is a general recognition that it is desirable to attract the highest quality of young men as officers. This will not be possible if those who retire, and subsequently secure employment in State, semi-State or undertakings in which abatement applies, find that their pay is affected.

It is true to say that the position which has obtained up to this is most unsatisfactory, unfair and inequitable. I have before me certain cases I can give as examples. I have the case of a retired Army Officer who is a teacher. The maximum he may receive by way of civil pay—that is, pay from Government sources and retired pay—is £1,040 per annum, the rate of his Army pay on retirement plus an increase of five per cent of retired pay granted in October, 1964, making a total of £1,062. The increase in civil remuneration subsequent to 15th December, 1959, other than the five per cent I have already mentioned, did not affect the ceiling. In effect, that means that from April of this year to April, 1966, this person's pension will be reduced by approximately £230 and any increases he might get as a teacher by way of increment or award will not be of any benefit until such time as the balance of his pension has been absorbed.

In this particular case, and in many similar cases, the individual concerned contributes to a superannuation fund; five per cent of his pay as a teacher is deducted so that his effective pay is reduced by this percentage whenever he becomes entitled to an increment or a pay award. This abatement clause deprives him, therefore, of the opportunity to avail of perquisites enjoyed by other secondary teachers, such as fees payable for correcting examination papers or supervising examinations.

Debate adjourned.
The Dáil adjourned at 5 p.m. until 3 p.m. on Tuesday, 25th May, 1965.
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