The purpose of this Bill is to give statutory force and effect to the pensions increases payable from the Exchequer or other public funds, including the funds of local and harbour authorities, which were announced in the Budget last April.
Under the Bill, pensions which were calculated on the salaries payable prior to the general Civil Service pay increase of 1st November, 1948, are to be increased by 6 per cent., and pensions calculated on the salaries payable during the period after the pay increase of 1st November, 1948, and before the pay increase of 1st November, 1952, are to be increased by 4 per cent. No increase is being given on this occasion to pensioners who retired on or after 1st November, 1952, with full benefit from the higher rates of salary which came into operation on that date. It has been decided that whatever moneys could be made available for pensions increases this year should be applied for the benefit of the older pensioners whose pensions were calculated on pre-November, 1948, and pre-November, 1952, salaries. These pensions are lower than the pensions of their colleagues who retired after 1st November, 1952, and they have accordingly been given priority in the matter of pensions increases.
Because it would be anomalous if a pre-November, 1952, pension were increased above the pension of a colleague who retired with the same rank and service in November, 1952, or subsequently, there is a limitation in this Bill, as there was in the Pensions (Increase) Act, 1956, that no pension may be increased above the pension that would be payable if the pensioner had retired with the same rank and service on 1st November, 1952, with the benefit of the pay increase given on that date. In some cases pensions have already been brought up to the November, 1952, level, or very near it, under previous legislation, and these pensioners will not accordingly be entitled to any further increase or only to a small one. As the limited increases in these cases have been the subject of some comment, I would like to point out that all these pensioners are now getting the same pensions as their colleagues who retired in November, 1952. If the increases payable in some cases are small, it is because these pensioners needed only small increases to bring their pensions up to the November, 1952, level. These pensioners, together with the pensioners who retired in the three years from November, 1952, to October, 1955, now from a group which will be considered as a single class for the purpose of any further increase in pensions. As I have already explained, the moneys available this year have been applied to the relief of pensioners who have not yet reached the November, 1952, level.
In some cases, the pay increases corresponding to the Civil Service pay increases of 1st November, 1948, and 1st November, 1952, were granted on other dates. Provision has been made in the Bill to enable the actual date of the corresponding pay increase to be taken in determining whether a 6 per cent. or a 4 per cent. increase is payable. Accordingly, in referring to the 1st November, 1948, or the 1st November, 1952, I should wish to be taken as referring also to any alternative dates that may be adopted under the Bill.
The classes of pensions to be increased are described in the Schedule to the Bill. Only civil pensions are covered by this Bill; the increases in Army and Military Service Pensions will be covered by separate legislation. Part I of the Schedule to the Bill covers retired Civil Servants, Teachers, Gardaí and other civil pensioners whose pensions were calculated on the remuneration payable before the pay increase of 1st November, 1948, or the appropriate alternative date. These pensions will be increased by 6 per cent. All other pensions covered by Part I of the Schedule to the Pensions (Increase) Act, 1956, and which have not yet been raised to the November. 1952, level will be increased by 4 per cent. subject to the overriding maximum which I have already explained. The increases will be calculated on the existing pensions, including any increases under previous Acts.
The widows and children of Ministers and other holders of parliamentary offices and the widows of Gardaí, etc., are covered by Part II of the Schedule. Local authority pensioners are covered by Part III and harbour authority pensioners by Part IV. Most of the widows' pensions in Part II of the Schedule are payable at basic rates fixed prior to 1948, to which the 1949 and 1956 pensions increases have been added. These fixed rate pensions will all be increased by the 6 per cent. appropriate to pre-November, 1948, pensions, and the new rates will apply to all pensions granted in future, as well as to existing pensions.
Generally, pensions covered by the Bill were calculated on the annual salary payable at the date of the officer's retirement. In a few cases, however, pension was calculated on average salary for the three years preceding retirement. A special provision has been made in Section 7 of the Bill to allow part of the 6 per cent. or 4 per cent. increase to be given in such cases. The increase allowed will be proportionate to the part of the three-year average period which fell before the 1st November, 1948, or the 1st November, 1952, respectively.
Prior to the pay increase of 15th January, 1951, the remuneration of some officers, mainly in the Civil Service, was affected by a restriction known as the "supercut". The supercut originated as a reduction in the cost-of-living bonus on higher Civil Service salaries and it continued over into the consolidated salary rates after 1946 until it was partially restored in 1948 and completely in January, 1951. It had also, of course, affected pensioners who retired before January, 1951, and whose pensions were based on salaries as reduced by the supercut. Under Sections 3 and 4 of the Pensions (Increase) Act, 1956, the pensioners who retired prior to January, 1951, were given either a revision of pension to restore the supercut reduction or the appropriate percentage increase under the Act, whichever was the more favourable. Following representations from the pensioners concerned, these sections have been amended by Section 2 of the present Bill to restore the supercut reduction in all cases and to allow, in addition, the appropriate percentage increases under the 1956 Act and this Bill. Under this provision, the basis of these pensions will now be brought into line with the position of other ranks of the Civil Service whose pensions were based on salaries in which the cost-of-living bonus element was not subject to reduction.
Authority for the appropriate increases in pensions payable from the Exchequer will be found in Sections 3, 4 and 7, while Sections 5 and 6 provide for the increases in pensions payable by local authorities and harbour authorities. These latter increases will be subject to the approval of the Minister for Local Government or the Minister for Health in the case of local authority pensions and to the approval of the Minister for Transport and Power in the case of harbour authority pensions. The increases allowed will in all cases follow the pattern and the conditions of the increases in Exchequer pensions.
Section 10 of the Bill contains various consequential provisions such as, for example, the application to the increased pensions of the statutory provisions which applied to the original pensions. It also provides that any increase under the Bill shall not be assessed as means for the purpose of an Old Age Pension or a widow's noncontributory pension.
The cost to the Exchequer of this Bill is estimated at over £70,000 in a full year. In the current year the cost will be over £38,000. Adding the increases in Army and Military Service Pensions which will be covered by separate legislation, the total cost to the Exchequer of this year's pensions increases will amount to almost £130,000 in a full year.
I commend this Bill to the House for its approval.