Dáil Éireann díospóireacht -
Thursday, 7 Oct 1999

Vol. 508 No. 5

Adjournment Debate. - Pension Provisions.

Mr. Finucane

I thank the Minister for being present. The recent review of the widow's-widower's non-contributory pension is most unjust. About 850 pensioners in receipt of a British widow's or retirement pension are being reviewed. These widows and widowers are receiving a reduced Irish pension already and they will suffer a further reduction because of the cold hearted attitude of the Department.

Due to the strength of sterling, the widow's pension is being reduced accordingly. Many of these widows have approached me. They are most upset and correctly point out that when the punt was stronger than sterling the Department was not sympathetic to them then and did not review their Irish pensions accordingly. In this time of economic buoyancy, it is disgraceful to reduce their pensions.

Recently I met two of these pensioners and I have received telephone calls from others. The first pensioner was eligible for the old age non-contributory pension as she was over 66 years of age. However, as it was not to her financial advantage to progress to the old age non-contributory pension, she remained on the widow's pension.

Many of those who receive letters from the Department of Social, Community and Family Affairs indicating that they are reviewing their books find it quite intimidating given that many of these pensions are reduced already on the basis of the UK pension. This lady was in receipt of £60.50 which was reduced by £26 to £34.50. That was a drastic reduction for someone who was in receipt of an ongoing Irish pension and a UK pension. Both these people, who were the losers in this arrangement, pointed out to me that they were already saving the State a certain amount of money because they were getting a reduced Irish pension as a result of receiving a UK pension. Many of these people feel vulnerable because they live alone in rural areas and are sometimes traumatised by the loss of a loved one. The review is a bit of a kick in the teeth on the part of the Department at a time of economic buoyancy to these 850 people who end up in a very adverse financial situation. It also indicates a cold hearted attitude on the part of the Department towards recipients of social welfare benefits.

The Minister should consider the matter and decide not to proceed with this review because these people deserve a caring approach. The Department has dealt with the issue in a very insensitive manner. I ask the Minister, whom I believe to be sympathetic to these issues, to again look at the matter. I am sure some of the 850 people involved come from the Minister's County Louth constituency and will be affected by this decision. I look forward to his reply.

Mr. D. Ahern

I thank the Deputy for raising this issue which relates to the means of persons in receipt of widow's or widower's non-contributory pension from my Department who are also in receipt of a social security pension from the UK.

First, there has been no change in the rules for payment of widow's non-contributory pensions by my Department since I took up office two years ago. The essential feature of all non-contributory social assistance schemes is that any other income which a person has must be taken into account in deciding the rate of pension which they are due. The purpose of this is to ensure generally that people on social assistance means-tested payments are left with the same amount of income, either from their social welfare payment alone, where they have no other means, or from a combination of partial pension and income from other sources. Income from UK pensions is assessable as means for non-contributory pensions and, under the legislation, must be taken into account in the same way as income from any other source.

Non-contributory pensions are means-tested payments, provision for which is contained in the various social welfare Acts. The legislation contains the rules for the calculation of means, the various disregards of means which are allowed and sets out the amounts of pension payable, having regard to a person's means. Legislation also requires a person to notify the Department in writing if means have increased since the date of making a claim or the date of last investigation of means. Where such notification is received, the amount of pension payment is adjusted as appropriate in accordance with relevant legislative provisions.

The question of the effect of currency fluctuations on the value of UK pensions is also relevant. In calculating means for non-contributory pension purposes, pensions paid in sterling must be converted into Irish punts. As currency exchange rates fluctuate frequently, and in view of the number of Irish non-contributory pen sioners in receipt of British pensions, it would not be practicable to reassess entitlement each time exchange rates move. Accordingly, when converting currency for means purposes prior to 1 January 1999, the Department used an exchange rate mechanism which was used within the EU for social security transactions between member states. For those countries not participating in the EMU, including the UK, this mechanism continues to be used. The rate represents the average daily exchange rates in the first month of the quarter for use in all transactions during the course of the succeeding quarter. This has been the method used by my Department for many years for converting pensioners' pensions paid in sterling to punts. It has been the practice in my Department to use the rate of exchange which is most beneficial to the pensioner between the rate at the time the review commenced and the rate at the time the decision is made. The rate of exchange in use for the current review is IR£1.12043 to £1 sterling. This figure is considerably less than the true High Street value.

Finally, I am sure the Deputy is aware that decisions on entitlement to pension or, for that matter, under any other statutory social welfare schemes under social welfare legislation are matters for statutorily appointed deciding officers appointed by the Minister of the day but who are completely independent of the Minister in the exercise of their function. I would like to emphasise that it is not the function of the Minister, nor is it possible for the Minister, therefore, to intervene or to try to influence decisions in individual cases. When determining cases, deciding officers are bound by the legislation governing the scheme in question. Their task is to establish the facts of the case, based on the evidence available, and to then apply the legislation to those facts. A person who is dissatisfied with a decision of a deciding officer may appeal to the equally independent social welfare appeals office.

I am sure the House will appreciate that my Department is simply applying the legislation in this area. It is important to bear in mind, however, that we are required to treat all pensioners equitably, whatever their source of income or indeed if they have no income. I am proud of this Government's record in improving the position of all pensioners since we took up office with significant increases in all pension rates of up to 14 per cent. It is my intention that this process will be continued in the future.