I move:
That Dáil Éireann favours the establishment of a comprehensive national pensions scheme, based upon insurance contributions by all persons with income, to create an adequate system of social security to provide for people in old age, sickness, disability, unemployment and for dependants on death.
I am introducing this motion because I believe it would be a very good thing for the whole country. I believe at the moment we have employers and unions who are very much in favour of this. A worker who has worked all his life at whatever trade he is in, who has given good service to his employer—although admittedly he has worked for himself and has provided for his family by doing so—should be rewarded when he retires and should not have to beg for money. At the moment when a person reaches retiring age and there is no pension for him from his employer he has to depend on the Government to give him the old age pension or some social welfare benefit.
Most of the people who are retiring now started their working careers in the 1930s or late 1920s. At the time they began work there were very few pension schemes. Those people when they have to depend on a pension from the Government—I am not speaking specifically about the present Government—feel very aggrieved about it. In many cases they are too proud to collect this money. Any person who has worked 30 or 40 years has a right to a pension and should not have to beg for it but that is what it comes to at present.
Every Deputy has been asked to make representations to the Government or the Minister for Social Welfare to see if an extra 5/- or 2/6d, can be given to a particular person. If there was a regulation that person would know what he was entitled to and would not have to come to a Deputy or anybody else to get this money. Take a worker who is paying PAYE. He is paying that, in actual fact, for people who are now drawing social welfare benefits. Eventually when he comes to retiring age he will be paid social welfare benefits by the Government from money collected from people who are then working. A citizen is more independent and makes a better citizen if he can get a pension to which he is entitled rather than having to feel he is living on charity, even though he had paid in that money beforehand.
I know many of those people may have been able to put money aside during their working years and may be able to provide for themselves, but there are many others who have not been able to do so. Many workers have not been in good health during their working life and they have also had large families to take care of. When they come to retiring age they have no money laid aside and if they do not get a pension from their employers they have to depend on the Government. Sometimes the Government's priorities can be motivated by a general election. At that time they will announce an increase for social welfare recipients but those people often have to wait many months before they get that money.
In England recently there was an announcement that a person who received a retirement pension would get a rise every year, not necessarily when there was an increase in the cost of living. This means the pension there will go up gradually. In this country at the moment there are many people living in poverty because their old age pension is too small. Their families are not able to help them because they have their own families to look after and they have their own commitments. One may ask why did those old people not save while they were young? It is practically impossible for workers to save while rearing their families. Very often those people have to contend with illness or strikes and this eats into any small amount they may have laid aside.
The Department of Labour are involved in this matter too. For the last few years we have had leapfrogging in wages. We have had one group getting an extra 10/-, the next getting an extra £1 and so it goes on from that. I said when speaking on the Labour Estimate that I felt all increases should occur in one or two months in the year and there should be freedom from increases for the rest of the year. We also had the unions bringing in a productivity clause whereby a worker was given a productivity bonus. This also caused leapfrogging as some workers received a bigger bonus than others.
We should bring in a national pension scheme at this stage. If this is not done we will have one employer or group of employers giving a pension and then another group giving a better pension and leapfrogging will also occur here. If a national pension scheme was brought in by the Government it would prevent this leapfrogging. I can tell the House that most employers are pro pension schemes and so also are the unions, but the trouble is that no-one wants to start off because when a pension scheme is granted it means the cost has to be paid for in some way and it must be tied in to a wage increase. The Government should say: "We will have a national pension scheme." The employers and the unions would then accept this.
Sometimes it happens that a man is not willing to put anything aside for his family for an emergency, perhaps because of ill-health. In a case like this, if there was a national pension scheme, he would be subscribing to it as well as his employer and he would then leave something to his wife and family. I advocate that the widow should be able to take over the pension if he died when he was young.
Recently I because aware of the case of a man who worked for a firm which had a pension scheme. He left that firm to take up a better position in another firm which did not have a pension scheme. Later, he went back to the original firm but by the time he died, at the age of 38, he had only two years participation in the pension scheme. He left his wife and seven children without anything. Because of the big family, he could not save during his lifetime. There should be something on a national scale to cover cases like that.
Of course, private pension schemes tend to put up costs in the industries concerned. It is vital for a worker to have a pension to look forward to. It is not as important as owning his own house but is it more important than owning a block of shares which can go up or down in value. A man must provide that when he reaches old age there will be something of which he can be sure, something that will not disappear. It may be devalued by inflation, but it is something certain.
Many small firms cannot afford pension schemes. It is too expensive for them to go to insurance companies. The big firms who have a bigger number of workers have a great advantage in this respect. They can even attract workers from the smaller firms and in the process put these firms out of business. It has been pointed out that we require larger units in industry because of the imminence of EEC entry but the breaking up of our smaller industrial units would not do any good to the country.
If a worker participates in a pension scheme he has less worry, apart from the rearing and educating of his children, and he is therefore able to work better. Many of us occasionally get a pain in our left side and think we are about to get a heart attack. If a working man continually has to think of his old age and worries about it he is more likely to get a heart attack than if he had a pension to look forward to in his old age.
Most salary earners in this country have pension schemes but many wage earners have not. Latterly, the latter type of worker has been participating gradually in pension schemes but there is nothing definite or comprehensive about them. Trade unions have so much work to do otherwise that they cannot be expected to go around to every individual in an effort to organise pension schemes. Therefore, the institution of a comprehensive national scheme devolves on the Government. One of the first things that should be done in such a national scheme would be to bring salary earners and wage earners closer together in the matter of benefits and payments.
I should like to say a word at this point about secondary teachers. It is only after 40 years of service that secondary teachers are entitled to get the equivalent of half their salaries by way of pension. Forty years is a long time to have to wait to get a pension of half one's salary. It should be possible to have a shorter period. Some people prefer pensions for workers along the lines of percentage profit sharing. It means that a man can earn a bigger amount initially and taper off as he grows older and as he works less. I prefer this method of compensating people as they grow older—a simple tapering off of the amount of their wages or salaries. I know this is not feasible at the moment and therefore the alternative is a State pension scheme.
Briefly, the scheme I have in mind is a comprehensive one based on contributions from employers and employees. The contributions should be on a fixed percentage of salaries or wages, not on a flat rate. In this respect it is interesting to note that the only countries in Western Europe which believe in a flat rate are Ireland and England. The comprehensive scheme of which I speak, from the contribution point of view, could be based on the PAYE system. It should embrace all workers and it should supersede present State pension schemes. There should be special provisions for unemployable people, people who are unable to work for physical or mental reasons. There should be provision to enable the wife to take over the pension. Usually there are three or four children and the widow has to provide for them after the husband's death. If she goes to work the children are out on the road, which causes the State quite a lot of money either in prosecuting them, or prosecuting the mother for neglecting them. I feel she should get the whole pension. If necessary, at this stage portion of the money required should be found by the Government because if she had not the full pension she would have to get a widow's pension including a sum for the children. Otherwise, the fund would operate itself. We are not like England where there is full employment and they have not much emigration. We should provide, too, for broken periods of employment—where there is emigration and subsequent return, for example. In a local government scheme if you work 200 days it counts as a year and again this should come into it.
I want to emphasise my belief that a national pension scheme must coincide with wages. Something which happened here has been rectified in the Finance Act: men who went out on pensions 20 years ago were still getting the same pensions even though the spending power of their money had decreased by between 50 and 100 per cent. There should be an increase every two years or so in the pension. In England, it was suggested that instead of a 50 per cent pension, a 36 per cent pension on the average of the years worked should be given and this is what they have done. When you are two years retired they take the next two years as if you worked, add it to the total, and take the average again. In this way the pension is gradually going up. You are not fully covering inflation but you are doing so to some extent. There may be some reluctance to reduce the figure from 50 per cent to 36 per cent but when a man retires he usually gets a lump sum, or has something saved, and he can manage for a couple of years. His big trouble occurs ten or 12 years later because of inflation throughout the world and here in particular. If he got some increase in his pension over a period of years it would be worth sacrificing the first few years.
Female employees should have the right to a refund of contributions on marriage and I would favour that being tied to a clause whereby this money would be paid to them if they are putting it into a house with a view to getting married. This might save a lot of money in loans and so on. They should be allowed to do this provided the money is not just taken out and blown. No income tax should be levied on pension payments because, as I shall show later, most of this money can be used by the Government for expansion, at the cost of paying interest on it, of course.
One result of this which most people would favour would be that it would take spending power away from people in their teens, from 18 to 22, and would transfer it to an older group. Very often much of the money spent when we are young is wasted while money is badly needed for older people. This money should be invested in national production. The Minister for Finance said that by 1980 we wanted full employment and that to this end we wanted profits and savings re-invested. This would be a case of savings and it could do a great deal for the country.
I should also like sickness and unemployment benefits to be in some way tied to this pension scheme. At present a person who is earning pays income tax which is collected by the Government and then paid out to old people who may be taken as retired people. All I seek to do is to ensure that people at present working provide for their future and that they should now have a pension scheme. The Government would gain by this through having less need for social services in the future for retired people who will be covered by their pension. There will be some, perhaps, in dire circumstances who will need assistance but generally they will be able to provide for themselves by means of their pensions.
If a girl were allowed to withdraw her payments on marriage and put them towards her house, fewer local authority houses would be required. If a girl and her fiancé were buying a small dwelling they would have a bigger deposit to put down and smaller repayments to meet later. Meantime, the Government could use this money, pay interest on it, or put it into a national loan which would provide badly needed capital. If one reads the papers this evening and sees the wage increases that are being demanded one cannot imagine how it will end, but a pension scheme of this kind will, I believe, prevent much of the inflation that the Ministers for Finance and Labour have been speaking about. It would comply with the exhortation of the Minister for Finance in that this money in conjunction with profits and investment from abroad, would help to provide more jobs which are needed if we are to reach full employment by 1980.
In future years when this pension scheme would be in operation and the new workers would be paying towards it, the money that is now collected under PAYE to pay for social welfare benefits or old age pensions would be available for some other use. If today every old person had 50 per cent of his salary as a pension we would not require the same Government subsidies for houses for old people or free turf or other free services. They would have sufficient money for their needs if they had that pension. This would also save the Government money and it would also save the cost of administration which is tremendous.
Much bureaucracy would go if this pension scheme were introduced and it would tend to make better citizens when people could get something by right and not have to beg for it. We would need fewer homes for old people and county homes and other such institutions would disappear if these people had pensions. Today they must go to such places because they are destitute. It is terrible that we should have people destitute because whatever they get in old age pensions is absorbed to the extent of about half or two-thirds by the hospital or institution which houses them. If they had a proper pension the Government would not have the problem of the upkeep of these homes where the cost is about £20 per patient. Perhaps that figure might not apply to homes. In a hospital the cost would be £20 and in a home it might be £14 or £15. They should be able to keep themselves and have a sufficiently large pension to manage on. Some of the patients in these homes have to have hospitalisation of some sort. In years to come we will not have the same numbers in the religious communities to maintain these homes because there are fewer vocations nowadays and fewer people going into convents.
We should have a national pension scheme. Men should now provide for the future rather than having to beg— perhaps, that is a strong word—from the Government for something to exist on rather than starving. Some of them depend on their sons and daughters but, at times, their sons and daughters cannot afford to give them anything. They should have this pension as of right and not have to beg me and other Deputies: "Get me another 2/-. I need it. If I do not get it I will have to do without a piece of meat this week."
In the long run it would cost the Government less. It may raise costs slightly, but only minimally. Very often it could be tied in with wage agreements. A worker at 20 years of age is not interested in a pension because he does not think he will ever be old, but a married man of 34 years certainly thinks of a pension scheme. A pension scheme like this would help us in industrial relations and would help us to feel reasonably happy with ourselves.
