Dáil Éireann díospóireacht -
Thursday, 2 Jul 1998

Vol. 493 No. 5

Adjournment Debate. - Defence Forces Allowances.

Mr. Penrose

I thank the Minister for taking time out of a busy schedule to come in to deal with the matter. I propose to share time with my colleague, Deputy Wall.

I am delighted to have an opportunity to contribute on this important matter. During the past year or so, a large number of retired military personnel have contacted me because they feel aggrieved at the anomalous and discriminatory position created by the Departments of Defence and Finance, whereby a decision was made to limit the payment of the additional military service allowance retrospectively from 1 August 1990, clearly discriminating against those military personnel who retired on or before this date.

The military service allowance scheme was intended as compensation for the special conditions associated with military life, for example, long unsocial hours, no provision for the payment of overtime and other unique features of employment. It was first introduced for all enlisted personnel and junior officials, up to and including the rank of captain, effective from 1 May 1979. In 1988, commandants became eligible for payment of MSA and the allowance was extended to senior officials with effect from 1 August 1990.

The nub of the matter is that in 1990 the Gleeson Commission on remuneration and conditions of service in the Defence Forces considered that MSA constituted an integral part of military pay and recommended that the Departments of Defence and Finance should give early and positive consideration to the question of making the allowance fully reckonable for superannuation purposes. It also recommended that the pension scheme be amended to reflect this recommendation. Subsequently, as a result of discussions — which I do not think included any members of the Defence Forces pensioners' association — the military service allowance was introduced as a part of reckonable income for superannuation purposes for personnel retiring on or after 1 August 1990. Surely the Defence Forces pension scheme should be based on the principle of parity, that is, the relationship between the person and the remuneration of his or her successor performing substantially the same duties as those previously discharged by the person in the same employment should be maintained.

In 1995, a total of 5,600 pensioners, which included officers, enlisted personnel and widows of deceased personnel, were estimated by the Minister's Department to have been excluded from the MSA payment. At that time it was estimated it would cost about £4 million per annum to pay this group. However, recent official figures from the Department of Defence have indicated that the total number of pensioners excluded from the MSA additional payment has fallen to 5,060. So, in less than three years about 550 retired pensioners have died and the number will decline steadily over the coming years. Therefore, the annual cost of paying the allowance will diminish significantly and will continue to decrease. I know the Minister has many areas to cover in his Department but he is not being burdened with an ever increasing cost; the opposite is the case.

The decision to limit the payment of the additional military service allowance retrospectively from 1 August 1990 does not stand up when examined on any basis of equity. The principle of accepting MSA as an integral part of salary does not change in practice by choice of dates and those excluded are clearly being unfairly treated. I urge the Minister to change it now. Personnel who retired prior to 1 August deserve no less.

Mr. Wall

I welcome the opportunity to raise this matter concerning discrimination against military personnel who retired before 1 August 1990 with regard to the military service allowance. I thank the Minister for personally taking the matter.

Consistently, throughout the years, successive Ministers for Defence and other esteemed politicians have referred to the devoted service which our military forces have displayed, not only in Ireland but throughout the world. In particular, their role in peacekeeping has been commendable. In the Congo, where some of our forces lost their lives, our military personnel did an excellent job. The anomaly which exists for those retired personnel who retired prior to August 1990 with regard to the military service allowance is effectively a kick in the teeth to those people who put their lives at risk for the good of others.

Because of disability and other damages inflicted through the type of work in which our Defence Forces have engaged, many have found that upon having to retire or on reaching retirement, they are left to live in poverty. This is particularly so for those who leave at quite a young age and who, because of a work inflicted disability, are unable to participate in the workforce.

The high mortality rate among retired members of the Defence Forces speaks for itself. Each year the numbers in receipt of the military service allowance decreases steadily. In 1995 a total of 5,600 pensioners were excluded from the MSA. In 1996 that number had fallen to 5,400. In the space of 12 months 200 of those had died. I understand that the trend for more recent years is similar. Because of this, the cost of extending the MSA, which was estimated to be £4 million in 1995, is dropping all the time.

Next year is the European Year of the Elderly. Today, the CSO released further evidence that our economy is booming. Given the valuable service which our forces have provided, I request the Minister to merge these two facts and extend the MSA to those military personnel who have been unjustly excluded.

Minister for Defence (Mr. M. Smith)

I thank Deputies Penrose and Wall for raising this matter. The Defence Forces pensions code is unique in the public sector in that provision is made for the payment of immediate pensions and gratuities after unusually short periods of service and regardless of age.

The minimum service required for a pension and gratuity is 12 years in the case of commissioned officers and 21 years in the case of enlisted personnel. Maximum pension can be attained after 24 or 25 years' service by officers and 31 years by enlisted personnel.

Military service allowance, known as MSA, was introduced in 1979 as compensation for the special disadvantages associated with military life and was not reckonable for pension or gratuity purposes. The inclusion of MSA in the calculation of superannuation benefits for military personnel arose from a recommendation made in 1990 by the commission on remuneration on conditions of service in the Defence Forces — the Gleeson Commission.

The agreed arrangements provide, subject to certain conditions, for increases in pensions and gratuities to take account of MSA in the case of personnel retiring on or after 1 August 1990 — the day following publication of the Commission's report. MSA has been reckoned in the calculation of the pensions of all qualified persons who retired since that date.

The implementation of the Gleeson Commission's recommendation was the subject of detailed and lengthy discussions with the military representative associations. In that context, the various arguments in support of the view that MSA should be reflected in the pensions of personnel who retired before 1 August 1990 were fully considered. However, having regard to the established practice followed in other areas of the public service and the considerable cost involved, which is not confined to my Department alone, it has not been possible to extend the scope of the commission's recommendation to personnel who retired before 1 August 1990.

The Gleeson Commission concluded that the overall value of the superannuation benefits provided for the Defence Forces is considerably in excess of those available under other public service schemes. Deputies may be aware that a commission on public service pensions was established by Government in February 1996 against a background of growing concern generally about the emerging cost of existing public service pensions. The Commission has very broad terms of reference to examine and report on the occupational pension arrangements of public servants, including claims for improvements in existing superannuation benefits. In that regard, I understand that pensioner groups such as the association of retired commissioned officers and the Irish UN veterans' association were among various groups which made submissions to the commission.

The commission is an independent body and is scheduled to make its final report to Government in 1998. In its interim report, published in November 1997, the commission lists the pensionability of overtime and allowances as one of the main issues raised by parties who made submissions. The Government will consider any recommendations the commission may make in this regard.

For the information of Deputies, the pension payable to an NCO or private on retirement consists of: (a) a basic flat rate in respect of 21 years' service, which ranges from £102.59 a week for a private to £152.57 for a sergeant-major; (b) an addition to basic pension of £16.11 a week in respect of MSA, which is 40 per cent of the rate of that allowance; (c) where pensionable service is 31 or more years, there is an increased addition in respect of MSA of £20.14 a week, which is 50 per cent of the rate of that allowance; (d) an additional increment of £3.92 a week in respect of each year of pensionable service in excess of 21 years, but not exceeding 31 years.

The minimum pension payable to a captain retiring with 12 years' service is £5,218 a year, while the maximum pension for a lieutenantcolonel with 25 years' service is £16,830 a year, inclusive of MSA addition in each case.

I reiterate that this matter, among other things, is under active consideration. When the report is made available the Government will be prepared to back positively whatever recommendations emerge.