asked the Minister for the Public Service if he is aware that widows of civil servants whose husbands died prior to 1968 receive approximately one-quarter of their husbands' pension; and if he will have this rate updated in line with the present system.
Ceisteanna—Questions. Oral Answers. - Civil Servants Widows' Pensions.
22.
Civil servants who retired or died prior to the introduction of the contributory widows' and children's pension scheme on 23 July, 1968, made no contribution towards pensions for their widows and accordingly were not members of that scheme. Their widows do not, therefore, benefit from the scheme.
A scheme of ex-gratia pensions was provided with effect from 1st October, 1969, for the widows of established civil servants who retired or died prior to 23rd July, 1968. No contributions are charged and the benefit amounts to one-half of the pension which would have been payable under the contributory scheme. As a widow in the contributory scheme receives one-half of her husband's actual or notional pension entitlement the benefit for an ex-gratia widow is, in all cases, one-quarter of that pension. The benefits are increased from time to time as the pension rates of retired civil servants increase. The ex-gratia pensions were, for instance, increased by 9 per cent approximately with effect from July 1st last.
It was estimated, following an actuarial survey, that the capital cost as at 31st December, 1972, of bringing existing and future ex-gratia pensions for the Civil Service alone up to the level of the contributory pensions was £7,353,000. Any concession to the Civil Service would have to be extended to the rest of the public service and this would raise the capital cost to approximately £22 million. In terms of the current annual rate of expenditure on ex-gratia pensions in the public service, including the Civil Service, doubling the rate would entail an extra annual charge of almost £2,200,000 on already over-burdened Exchequer resources. In addition, there could be claims by other groups for compensatory concessions.
When the results of the actuarial survey became available, the staff associations were asked for their comments on the question of existing members of the contributory scheme making higher contributions towards the cost of increasing ex-gratia pensions. The replies received did not indicate agreement to pay increased contributions.
In all the circumstances I regret it has not been found possible to further improve the provisions of the ex-gratia pensions scheme.
In reference to the replies received from the Civil Service associations, I think the wording the Minister gave was that their replies did not indicate willingness to contribute. Could he say if the replies indicate unwillingness or refusal to contribute?
Yes, I would so interpet the replies.
May I ask the Minister if, having regard to the fact, of which I am sure he is well aware, that the category of widow involved in this includes quite a number of people who are living in very difficult circumstances, he would consider or has considered that an approach to this matter might be based on the payment of some contribution by the people to benefit coupled with a formal guarantee or insurance to the Exchequer in respect of those who might die prematurely, guaranteeing the continuing payment of contributions to bring these people into the same position as those who are now benefiting?
The capital sum to be paid by a widow to meet in full the cost of doubling her pension would depend on her age and the amount of her pension. But if she paid on the basis of the husband's contributory scheme, 1 per cent of the husband's salary at the rate applicable from 1st July, 1974, for each year of his service, which would be a maximum of 40 years, the amount paid would purchase as from the current date only the following proportions of the additional pension that would have been paid: at age 40, 39 per cent; at age 65, 51 per cent and at age 80, 70 per cent. I think it would be a very bad bargain to make a contribution to purchase such an inadequate benefit.
Yes, but the Minister will appreciate that a contribution situation could be worked out which would relate to payment of the additional pension from a current date rather than on the date on which the scheme commenced or on which the widows concerned would become entitled. I certainly could not suggest across the floor of the House a detailed method by which this could be done but could I ask the Minister to have the matter further examined on the lines I have outlined to see if some kind of compromise arrangement would be possible?
I know that the Deputy because of his previous responsibility is well aware of the immense complications in this matter and of the quite considerable ramifications which any alteration would have, but he may be assured that as far as I am concerned if any way can be found to ameliorate the position of these people without catastrophic consequences to the Revenue I would be quite well disposed to accept it. Any formula yet divised has had quite significant, and I think unacceptable consequences, but I shall certainly continue my search for a solution.