Wednesday, 8 April 1964
Dáil Eireann Debate
The purpose of this Bill is to give statutory authority for the pensions increases granted in 1962 and 1963 to various public service pensioners. The pensions covered by the Bill are civil pensions payable from the Exchequer and from other public funds, including pensions paid by local authorities and harbour authorities, as well as pensions paid by various statutory bodies. Separate legislation will be enacted to authorise similar increases in Army retired pay, disability pensions, special allowances and military service pensions. The increases in Exchequer pensions, both civil and military, are already being paid in most cases under the authority of Additional Estimates passed by this House on 18th July, 1962, and 28th November, 1963.
The provision of the Bill are explained in detail in the White Paper circulated with the text. The most notable feature of the Bill is the new basis adopted for the pensions increases of 1962 and 1963. Previous pensions increases had consisted of percentage additions which varied with the amount of the pension or the date of the pensioners' retirement, so as to provide a larger increase in the smaller pensions or for the longest retired pensioners. The 1962 and 1963 increases operated to bring all pensions currently payable to persons who retired before a certain date, up to a common level fixed in relation to post-retirement pay. The 1962 increases raised pensions to 1955 pay level, and added a further 6 per cent to these pensions and to pensions granted before the general pay increase of 1969, which became operative for the Civil Service on 15th December, 1959, and for other services in December, 1959, or in the early months of 1960.
The 1963 increases advanced pensions further, to 1959 pay level, so that all pensioners who retired before the dates in 1969-60 when the 1959 pay increases became operative have now been brought up to 1959 level. The resulting benefit was, of course, greatest for the longest retired pensioners. In the case of the older pensioners, some of whom had retired before 1939, the 1962 and 1963 increases have meant a substantial addition to their pensions over and above the increases already granted to them under the four earlier Pensions (Increase) Acts, 1950 to 1960.
The large-scale revision of pensions to the post-retirement pay level of 1959 was a more costly operation than any pensions increase previously granted. The estimated total annual cost to the Exchequer of the 1962 increases is £820,000 with a further £320,000 for the 1963 increases. Even allowing for some savings on the 1962 figure on account of deaths since August, 1962, the annual cost of the 1962 and 1963 pensions increases at the present time is estimated to be of the order of £1.1 million. The estimated annual cost to the Exchequer of earlier pensions increases was £212,000 for the 1960 increases, £130,000 in 1959 and £180,000 in 1956. The estimated annual cost of the increases granted in 1949 was £240,000.
The number of Exchequer pensions covered by this Bill for the 1962 increases is 10,106 divided into the following categories: 2,709 Civil Service pensioners at an annual cost of £121,000; 2,956 national teachers— annual cost, £195,000; 4,017 Garda  pensioners (including widows and children)—annual cost, £122,000; 424 RIC and miscellaneous—annual cost, £24,000.
The total annual cost of increases in these pensions is £462,000 to which must be added approximately £42,000 for recoupment of the Exchequer share of the 1962 increases in local authority pensions, making a total of £504,000 for the estimated annual cost to the Exchequer of the 1962 increases under this Bill. The 1963 increases payable under the Bill are estimated to cost a further £211,000 in a full year, of which £48,000 is for Civil Service pensioners, £60,000 for national teachers, £79,000 for the Garda pensioners and £9,000 for RIC and other small groups of pensioners; the remaining £15,000 is for recoupments to local authorities.
Increases in Army and military service pensions, retired pay and special allowances, which will be covered by separate legislation, will bring the cost to the Exchequer in a full year up to the figures of £820,000 and £320,000 already mentioned.
Another provision in the Bill which I should mention specially is section 29, under which future increases in civil pensions of the type covered in the Bill may be authorised by statutory regulations made by the Minister for Finance and laid before each House of the Oireachtas. This provision will relieve the House of the necessity of passing an Act to validate every new pensions increase. It will not, however, lighten the work of the Minister for Finance, who will always have the task of co-ordinating the many proposals for expenditure urged upon him in this House and elsewhere with the revenue available to him. In this situation, the Minister for Finance must hold a balance between the various sectors of the community so that the incidence of taxation and the distribution of benefits will tend to be fair and reasonable.
Over the past two years, a substantial allocation has been made from the Exchequer to public service pensioners. The needs of pensioners will continue  to be sympathetically considered and I hope that it will be possible to effect further improvements in their position from time to time. Their claims, however, will have to be considered in relation to the overall pattern of financial and economic development which must ultimately determine the benefits that can be provided for every class in the community, including pensioners.
Mr. Sweetman: I did not want to be discourteous to the Minister by interrupting him, but it is an unfortunate fact—and I do not think it is in any way due to discourtesy—that every time he stands up to make a speech such as this, except on the most major occasions, the persons responsible for it never circulate a copy of his speech. I am not hitting at his two officials here present; it is not their function. I know whose function it is and the Minister knows, and he ought to see that he is not put in the personally embarrassing position in which he has been, of having to apologise for the fact that the ordinary courtesy of circulating the Minister's speech has not been observed. I want to make it perfectly clear that I am not attributing any discourtesy to the Minister personally. It should not be necessary to refer to this on every occasion, as it has been.
The legislation in relation to pensions is one of the most complicated types of legislation that anybody is unfortunate enough to have to consider. The basis on which the pensions started with the Superannuation Acts in the last half of the last century has been kept the basis of composition of pensions ever since. I want to suggest to the Minister, and to the House, that in this modern age, we should look at the matter in an entirely different way. It is appropriate, I feel, that we should reconsider the whole basis of the composition of the pension. It was all right, in a day and age in which the value of money remained fixed, to say that a pension was payable by reference to the salary of the person at the date on which he retired. As far as I  can recollect, and I speak entirely subject to correction, the original Superannuation Act was one somewhere about 1874, or thereabouts. At that time, and subsequently, the value of money remained static. Nobody wants the value of money to continue to decrease as it has continued to decrease, but it is an unpleasant fact that it has been doing so steadily over the years.
The first class of people who are hit by a decrease in the value of money are those living on fixed incomes, and of those the pensioners are the greatest proportion. Some countries have already moved away from that conception. Some countries have decided that while the grade in which a person retires fixes the rate of pension at that time, nevertheless the actual money he receives varies with the value of that money, varies, as we would put it here, with the cost of living index figure.
I appreciate that for a Minister for Finance deliberately to tie pensions to a cost of living index figure is a very radical departure. It is something which should be examined and examined soon, because unless some new basis is taken, we will go on being grossly unfair to one section of the community. It has been the pattern in relation to payments to pensioners over the years that they have lagged a long way behind payments to other classes of the community in the increases that have been obtained to compensate for rises in the cost of living.
Naturally, those who are on pensions are not going to be allowed to take into account increases in productivity and increases in general improvement of the standard of living of those in employment. It is entirely wrong that where the value of money decreases substantially over a period the pensioners should only get the compensatory increase in their pensions to meet that decrease in the value of their money in a matter of some number of years after the decrease has made itself felt.
This Bill is of course only the legislative implementation of decisions announced in earlier Budgets, and, though I do not expect the Minister  for Finance to give an indication today of what he is, or is not going to include in his Budget, I want to urge very strongly on him that there is an obligation on him in that Budget to improve the lot of the pensioners. The increased costs on every one of us in every sector of our society today fall hardest and most inevitably on the person in receipt of a fixed income.
The pensioner is clearly one of these and clearly one of the most deserving of these classes. There is an obligation on the community to ensure that where people lose a substantial part of their purchasing power through no fault of their own, the State should consider how it can bring up the amount in relation to that purchasing power. I sincerely hope that when Tuesday comes, the Minister for Finance will have included in his Budget a sufficiency to bring the State pensioners not merely up to 1959 as this Bill does, but right up to the present time.
As I said in the beginning, this Bill is a most complicated piece of legislation, as is the whole pension legislation. I think I am correct in saying, however, that the effect of this Bill will be that there will be some simplification in at least the legislative end of pensions authorisation. But in addition to that, it has the effect of ensuring that the pension plan is homogeneous up to December, 1959, for State pensioners and January, 1960, for the indirect State pensioners and those of the teachers, Garda and so forth. I am not quite clear, however, exactly where this Bill goes in relation to its enabling provisions for local authorities. Is it clear that local authorities are empowered under this Bill to increase their pensions pari passu in the same way or must that be done by a separate Local Authorities Pensions Bill?
What I have said in relation to State pensioners applies with equal force to local authority pensioners. One of the effects of the lag over the years in regard to increases in pension to meet increases in the cost of living has been that some pensioners have gone to their reward and have, therefore,  never been able to take advantage of any increases, while others found they had not got the first increase to meet an increase in the cost of living when the second increase actually came along. They have been doubly hit from the point of view of the depreciation in the value of their money.
I have never been quite able to understand why a Bill such as this is necessary at all. The State has been paying these increases in pensions for the past two years under the authority of a Vote coupled with the Central Fund Bill or the Appropriation Bill. If that was sufficient authority to pay these increases up to date, why is it not sufficient authority now and for the future? It seems to me entirely illogical that an Estimate passed by the House and the inclusion of that in the Appropriation Act should have been adequate in 1962/63 and in 1963/64 but is not adequate in 1964/65. If it were right in one case, surely it should be right now and for the future?
The ambit of this Bill is, of course, a little wider because it also deals with streamlining, though I believe this streamlining does not go far enough. According to paragraph 13 of the explanatory memorandum, the provisions of this Bill apply to former Ministers and Parliamentary Secretaries and their widows. This has no relation to me personally since I did not have the requisite three years and so I can comment on it objectively. The loss that is frequently suffered by a Minister because of the break in his business and because of what he must do after he ceases to be a Minister are matters that should be taken into account in the computation of pension. I understand that no payments have been made in the respects I mention under the authority of Votes and the Appropriation Act. Why is an increase appropriate to be paid under an Estimate in one case and not appropriate in another case? Perhaps the Minister could unravel that matter.
When one considers the general problem of pensions and their equation to the value of money not merely at the time the person retired but also  at the time he wants to use the money, there is not really very much one can say on Second Reading. The general principle involved is more germane to a Committee Stage discussion during which the various sections can be considered specifically. I trust there will be a substantial period between now and the Committee Stage so that those who are interested outside will have an opportunity of studying the measure and making representations.
Mr. J.A. Costello: I wish to make a few short general observations on this measure. The Bill is, as the Minister has pointed out, the machinery necessary to give continued legal effect to increases already granted. The Bill, in fact, only does partial justice in a situation that has called clamantly for many years for alleviation and for a full measure of satisfaction for the injustice meted out to various categories of public servants. So far as the Bill is some alleviation of an injustice, it must be accepted. So far as it holds out any indication of future efforts to mitigate the continuing injustice that will be prevalent, notwithstanding this measure, then it is to be welcomed.
The only indication I can see appears in section 29. That is the only indication that those who are still suffering from injustice will have their cases adequately met. If I heard the Minister aright—he will forgive me when I say I found it a little difficult, particularly towards the end, to hear what he was saying—the Minister does hold out some sort of hope that at some time there will be some additional measure of relief for retired civil servants; they will get the benefit of increased productivity, or increased prosperity, or words to that effect. That is hopeful, perhaps, but it is not very helpful. It is very easy to say that we hope the prosperity of the country generally, the productivity of industry and agriculture, will enable public moneys to be given to retired public servants. The point is that that situation is always postponed and, in the meantime, retired civil servants and public servants generally suffer an injustice. It is no measure of satisfaction to them to know that at some future date some residue of these will gain  some little advantage, continuing in the meantime to suffer hardship.
Deputy Sweetman pointed out that the origins of superannuation go back to legislation in the British Parliament nearly a century ago. Pensions were then based on salaries payable at the time of retirement. Throughout all that period—some complications arose because conditions arising out of the First World War and, to some extent, the Second World War—the principle adopted was that pensions were really not gratuities but something in the nature of deferred pay. It is from that point of view that public servants who retired some years back are now claiming parity with those who are now retiring in circumstances and conditions entirely different. That is the real basis of their claim to justice in this matter.
Public servants who have got, or who will get this year as in years past, increases in their remuneration have got those increases on three counts. The first is, the fall in the value of money; the second the increase in the cost of living; and the third the increased prosperity of the country. These are the three principal points on which it is justifiable to increase pensions and wages. Each of them is applicable in the case of public servants who have retired, whatever the date of their retiral. Take the position of a person who retired three or four years ago. He finds himself at the age of 63 or 65 with the amount of money which he has to keep himself and his family, and at that stage many people have not yet discharged their family obligations, halved compared with what it was before his retiral.
As the years go by, the amount of money available to him falls in value each year, and year by year, not merely from the point of view of general inflation but also because of the increased cost of living. The amount of goods that money can buy has fallen steadily over the years. The cost of living has increased and is still increasing and will continue to increase by reason of the taxation imposed by the Minister. This all has its impact on the retired teacher, the retired civil servant and the retired civic guard.
We are told that the country is in a phase of prosperity and that is one  of the reasons given for the increase of 12 per cent in salaries. I have been asked by a constituent of mine why that 12 per cent has not been given to her. She is a retired secondary teacher who finds the continued increase in the cost of living intolerable. The price of everything as far as she is concerned has gone up; she has to face increased taxation and the increased cost of living. That lady, who is not so young now, has to face these problems and she is one of the types on whose behalf I am speaking. There are only three of these and I am sure the Minister is well aware of them all.
The next is the civil servant and I am taking the case of an executive officer who retired before 1959. In spite of this Bill, he will still receive £110 per annum less than an officer of the same grade who retires this year. This is only one such instance that I could give as I have a number of letters from my constituents on this matter. I have spent most of my official life advocating the claim that I am now advocating so it cannot be said that I am doing it in the evening of my political life.
The next series of incidents I should like to quote as representative of the injustice and unfairness of which I complain to the Minister, the House and the public is with regard to the civic guards. One is a retired chief superintendent and in speaking for him I speak for the 3,000 men, commissioned officers and non-commissioned officers, who served this State at the very beginning, who in very difficult times went as an unarmed force to keep order in this country. They are a section of the community which has been very badly treated in this matter. In the case of a chief superintendent who is now 63 years of age and who has retired for some few years, he finds himself very much worse off than a person of the same rank now retiring. He retired only a few short years ago but it is sufficiently far away for him not to get full advantage of these new increases.
Let me give some further instances. A guard retiring on 1st March, 1960, with 33 years service gets £290 4s. A guard retiring four years afterwards, on 1st March, 1964, and with 33 years  service gets £472 10s., which is a difference of £182 6s. I know that the only justification the Minister has for that is the financial one and that he can say he is expending £1.1 million in trying to ameliorate the injustice to which I refer but injustice is not sufficiently condoned by saying that we have not the money to remedy it. Money has been found for many other matters, not all of them as vital or as important as the cause of the people to whom I refer.
A sergeant who retired on 1st March, 1960, with 33 years service has a pension of £336 10s. while a sergeant who retired on 1st March this year with the same service has £529 17s. Surely that is a startling state of affairs. A superintendent who retired on 1st March, 1960, with 33 years service has a pension of £627 and a superintendent with the same service who retired on 1st March this year has £946 10s. A chief superintendent who retired on 1st March, 1960, with 33 years service has £815 and a chief superintendent with the same service who retired on 1st March this year has £1,207 10s.
I do not intend to give any further details. I am just taking these three examples as indicative of the position. I could give many more figures but I am sure the Minister has them all and knows them well. Those people whose cause I am advocating here are a section of the community that have been very badly treated by their employers, the State. I have been advocating their rights down through the years and I would now ask the Minister, when he is considering what can be done, to take the final and irrevocable step of giving parity to all pensioners. Those people who have retired for some years should be treated in the same manner as those who are now retiring. The conditions which justify larger pensions for those who are retiring now also warrant that the same measure of justice should be given to those who have retired over the years.
There should be no difference  between the pension of a guard who retired in 1960 and one who retired this year, considering what has taken place in the economy of the country since 1960 and which has justified the increased pensions given to the guard retiring now. The cost of living has gone up and the value of money has gone down. The Government claim prosperity for the country and in giving the 12 per cent increase, that has been one of their justifications. I now ask the Minister to take the last and final step of giving parity to all pensioners.
I have no doubt, looking at what has happened in the matter of pensions over the years, that various Ministers for Finance were forced, whether through considerations of justice, or political matters or pressure from the Dáil, to give pension increases in many cases, at intermittent intervals. That pressure will continue. Those who are now retired will probably find the pensions they get are not adequate to meet the conditions that may exist in two or three years' time. They will add their voices to the ancient voices of that residue of derelicts and a few years hence will still be looking for justice. Eventually the principle of parity will have to be given. Accordingly, I do think it would resound to the Minister's credit and also to the credit of the State if the Minister dispensed that justice which undoubtedly the claims of these sections of the community require.
Mr. Corish: This Bill merely gives legislative effect to the pension increase proposals contained in the 1962-63 Budget. I do not propose to comment on it at any great length. Suffice it to say that there is and has been for many years great dissatisfaction among pensioners in the Government service and in the local authority service with the rate of pension and the rate of pension increase that has been applied to them over the years. This Bill contains many complex and detailed provisions for the calculation of particular types of pensions but the main outline in the Bill is to give legislative effect to the proposals of 1962-63.
There has been some improvement in the manner in which pension increases  have been applied in recent years. However, we still have not reached a perfect or near-perfect system in order to ensure that justice and fair play will be given to those in receipt of or are depending on local authority or State pensions. The latest increase given in the Budget of 1963 and which is given the force of law now brings pensioners up to the level attained by those who retired in 1959. The ideal situation would be if the Minister found it possible to apply increases to those people as if they were retiring in 1964, 1965 or whatever year they might retire. That would be the ideal situation, not alone in respect of State and local authority pensioners but in respect of other pensioners for whom the Minister for Social Welfare, in particular, is responsible and possibly the Minister for Health.
The Minister must be conscious of the criticism there has been over the years of the delay in payment of many of these pension increases. Over the past couple of years, the Dáil Order Paper has been filled with questions asking when certain types of State and local authority pensions will be paid. I do not know whether the delay has been by reason of the framing of the legislation, the legislation which appears to us in this measure so detailed and complex in its provisions. I note there is a proposal in the Bill to provide for these increases in future by statutory regulations. I think it would be correct to assume that this will be a speedier method of making provision for these increases and for payment. That in itself is an advance and I trust my interpretation of that part of the Bill is correct.
I suppose the main criticism the Minister has levelled against him and the main criticism that Ministers for Finance down through the years have had levelled against them is that it is not enough. I gathered from some of the Minister's remarks a note of optimism to the effect that he was working towards a situation where pension increases would tend to keep pensions in line with increases in salaries and wages. We all trust that position will be attained soon. Of course, we sincerely hope the Minister in framing the proposals for next  week will have in mind especially that section of pensioners who at the present time are in receipt of very small pensions.
Mr. Cosgrave: I have repeatedly expressed the view that the time has come to review the basis on which pensions are awarded and granted. As has been said in the course of this debate and indeed on other occasions, pensions, as we understand them, are based on the rate of pay at retirement. That principle, if it is accepted as a principle, was all right when the value of money was constant. Pensions for State servants have now been in existence for almost a century. During the first 50 years or certainly up to the First World War, the principle of basing pensions on the rate of pay at retirement seemed an adequate and reasonable approach to the framing of pensions. A very radical change occurred with the inflation which followed the First World War. Although prices subsequently dropped, it altered the outlook on pensions generally. Since the last war, however, the situation has changed dramatically to the disadvantage of pensioners and not only is causing serious anomalies but has resulted in what can only be described as very unfair differentiation between pensioners who retired in a particular year or period and their colleagues who retired subsequently.
Examples have been given here this evening and many others could be given of State servants, civil servants, Garda and Army personnel, teachers and other categories that do not come to mind at the moment who retired a short period of two or three years ago. I have one case in mind of an officer who will not be three years retired until next June or July and whose colleague due to retire at the moment under the same age limit regulation, holding the same rank and precisely the same position, will have a pension of £3 a week approximately higher than he was awarded when he retired just three years ago. The reason we should review this whole system is the unfair situation which has developed arising from the system under which pensions are  based on the rate of pay at retirement. In some European countries a different system has been evolved and the time has come when we should look afresh at this problem and review the whole basis on which pensions are fixed with a view to reaching a situation in which pensions would be revised upwards on the basis of rises in the cost of living, or on whatever basis is agreed in respect of wages and salaries.
In recent years, and since the war, we had a number of wage and salary adjustments. The House is familiar with the fact that the most recent such adjustment is that known as the ninth round. These wage and salary adjustments are given in order to compensate people for the rise in the cost of living. There have been various rises over the years and, as has been pointed out, the cost of living is still rising. It is unfortunate from the general point of view that any degree of stability has only been short-lived and although there have been occasional periods since the war when price stability appeared to exist the periods were brief and the general experience has been a substantial and continuous rise in the cost of living and in the price level generally.
Generally, the pattern has now been evolved in which a wage and salary increase applies to all categories whether they are employed directly by the State or whether they are in private employment. The pattern in the recent ninth round increase was that a similar increase was granted to all categories and the 12 per cent increase applied right across the board not merely to State or semi-State concerns but to those employed in industry as well. This meant that those in receipt of wages and salaries were compensated for the rise in the cost of living and that adjustments were made to cushion them against the increase in prices and to bring them up, perhaps not fully in some cases, to the level of the standard of living which they enjoyed prior to the most recent rise in the cost of essentials and the most recent rise in the consumer price index. That has meant that those living on pensions or  fixed incomes, such as those living on the income from investments accumulated out of past savings, or on incomes from property, find that they have got a meagre increase or in some cases have not yet got any increase. I believe we have got to evolve a system similar to that in operation in some European countries under which at the same time as wage and salary adjustments are made comparable increases in pensions will be made in respect of retired State pensioners and other categories of pensions. There is no valid reason why pensioners should lag behind other categories in the community.
One of the bases on which salary and wage adjustments are made is that the general standard in the community, the level of productivity and the general level of prosperity, justifies it and that those engaged in a particular range of employment by their efforts and skill are contributing to the general increase not merely in prosperity but in certain aspects of productivity. That reason is valid for those engaged in industry and in agriculture and in certain other categories of employment, but there are many people in different avocations, even under the State, who, no matter how hard and efficiently they work, do not affect the rate of productivity one way or another or only to a very slight degree. The very nature of their work does not afford them an opportunity of having a direct impact or at least an impact of worthwhile dimensions on the level of productivity and the general level of prosperity. Therefore, to the extent they benefit through wage and salary increases they get an advantage over and above what is paid to pensioners and retired persons. There are a great many people, former civil servants, ex-Army or ex-Garda personnel, retired teachers, former local authority employees, retired post office and other workers, all of whom in their own way have given good service, to the best of their ability, for the duration of their employment in these callings. Indeed, some of them have given very distingiushed service. These people served the State well and now they find that because of the system under  which pensions are awarded those who retire now, compared with those who retired some years ago, will get a higher rate of pension. With the passage of time those who retire now will find that their pensions are based on the level of salary or wages in existence at the time of their retirement and their colleagues who retire subsequently will very likely have higher pensions unless we by legislative action or by deliberate policy decide to adopt an equitable and fair system, a system which will recognise that the whole basis on which pensions are based is no longer valid. The system was satisfactory enough prior to the first war and perhaps prior to the last war, but certainly it is no longer valid in the changing conditions which now exist, in which the value of money is no longer constant, and those in receipt of pensions are the worst hit.
There has been a good deal of discussion in recent months about the effect of the turnover tax and the fact that those who have got the ninth round increase have been compensated for the effects of the tax by the increase in their wages or salaries But, as I have said and as others have said, there are sections of the community who so far have got no commensurate benefit, who, in fact, have got no benefit at all in respect of the effects of the turnover tax and who have not benefited by the ninth round. These are pensioners of all sorts, whether State, semi-State, local authority or otherwise; persons living on fixed incomes from investments or from, say, property or other sources. All these categories find that their situation and their standard of living are being continuously depressed without any alleviation.
I believe and hope and the House and the country hope that the Minister next week will treat pensioners in a fair and reasonable manner. There are many sections of the community suffering severely because of the rise in the cost of living. I do not attribute all the rise to the Government or to the policy adopted. Some of it is outside the range of Government activity. Some of it is outside the scope of any  effective remedial action by the Government. Some of it is the effect of a general, world-wide trend, a trend that has not merely affected this country but has affected and is affecting Europe. But, at least we have the ability and the means to compensate to some extent those pensioners who have been adversely affected by the substantial rise in the cost of living and by the fact, as I have said, that pensions are based on an antiquated and out-of-date system that was appropriate enough in bygone times but is no longer valid in view of the decline in the value of money and the fact that the value of money no longer remains constant.
There is one other aspect of this matter that the Minister might consider further, that is, the question of a proper pensions scheme for widows of civil servants. I know that we introduced an Act in 1956 but it seems to me from the views I have heard expressed that that Act has not been availed of to the extent to which it might be or to the extent necessary to cover widows of civil servants. There is a strong case for a pensions system. Admittedly, civil servants generally serve for a longer period than Army personnel but there is a strong case for a pensions scheme for the widows of civil servants on a basis similar to that provided for widows of ex-Army personnel or, certainly, one which would provide pensions for the widows of civil servants in the same way as pensions are provided for widows of ex-Army personnel, ex-Gardaí and other categories.
I wish to join with the other Deputies who have spoken in urging on the Minister the desirability of devising as soon as possible a policy in regard to pensions and following that policy decision by the legislative and other administrative action necessary. I would urge him to decide that for the future a new approach to the method of assessing pensions is necessary, that we should get in line with the enlightened and progressive policies which are now being operated in a number of European countries under which pensions and retirement pay  are based on some arrangement or system which would keep them in line with rises in the cost of living and with wages and salary adjustments, rather than allow pensioners to be left at the tail-end of the financial and other arrangements made; to operate the economy of the State on the basis on which we would expect it to be operated; to consider particularly the weakest sections of the community as having a first charge on the resources of the nation.
Mr. A. Barry: The Minister's position is a very difficult one. I believe that any Minister for Finance in an inflationary period such as we are now moving through will have great difficulties. In fact, I am sure the Minister most nearly resembles the little boy we remember in the schoolbooks 50 or 60 years ago with his hands in the breach in the dam wall in Holland trying to keep the flood waters out. I can understand the Minister's reluctance. It is quite clear that he must be reluctant to add anything to the formidable bill which it is costing to run the country, to pay its servants and to pay its pensioners but, if we deal with the matter on that basis, that we only yield when we have to yield to claims for adjustments in reward or in pension, that will mean that only the most vocal and the most urgent will get their slice out of what is going and the least vocal and the weaker will suffer. That is the kind of jungle reaction of human nature and, indeed, of Ministers for Finance.
We all know that there are pockets of pensioners who have a real grievance and they will always have a grievance until all pensions are evenly, equally and equitably dispensed. Until the very brutally underpaid pension of the CIE worker is related in degree to the pension paid to the just-retired public servant, we must admit and accept the charge of injustice. Until all pensions are related to some scientific calculation that is based on actual cost of living indices, this injustice will continue. The strong will benefit and the smaller and the weaker groups will suffer.
The Minister himself cannot buy  as much with the £1 note in his pocket today as he could have bought five years ago. That sums up pretty well the case against any kind of differential in the scale of pensions for public servants who in their time have all performed and given the same service. Those who retired in the middle fifties did work that is comparable with the work done by those who are retiring now. They are finding it just as hard to live.
If this thing is done on a scientific basis, if all pensions are related to a cost of living index figure, it will have one advantage, that every Minister for Finance will know pretty accurately how much it will cost for every point increase in living costs and none of us can grumble.
Inflationary trends such as we have now are very savage and very unselective in their impact and it is our duty in this House to combat that by relating pensions, that is, all pensions, to real money values. Let us make sure that if we are paying a pension to a retired Secretary of a State Department, to an Army officer, to a retired sergeant of the Garda or even to a long-retired CIE worker, we will treat them all equally and fairly.
Mr. P. Hogan: (South Tipperary): I suppose we could say that, in the final analysis, governments cause inflation. Certainly, they have a great responsibility when inflation comes and they should be held responsible for that inflation. Up to the present time, inflation hits in our society here two sections of the people: the farming community and pensioners. The other section—the salaried classes, the workers—by virtue of their numerous organisations, have got their incomes adjusted. The pensioners have nowhere to turn. Certain other classes—industrialists, the stock exchange manipulators—can hedge against inflation and compensate themselves for increases in the cost of living or declines in the purchasing power of money.
I asked the Minister recently what it would cost to give parity to the various retired civil servants. I enumerated CIE, the Garda, the Army, the Civil  Service, ex-RIC and others. He told me he did not know what it would cost and said he thought the collection of the information would cause more trouble than it was worth. Perhaps the figure would be a tidy one. I do not know, and seemingly neither does the Minister.
I asked him subsequently whether he would consider introducing a pensions policy to provide automatic adjustment of pensions in proportion to the cost of living index figure. During the past ten years, the cost of living index figure has advanced at the rate of three per cent per annum. The Minister can correct me if I am wrong. That would have been something on which one could at least make a calculation. It is something from which the Minister could give us an estimate, if he agreed to provide a pensions policy based on the cost of living index figure, of how much it was likely to cost.
I would ask him to examine these two viewpoints—either parity or a scheme based on the cost of living index figure idea. I feel sure it would be quite an easy matter to devise an alternative formula—there must be a choice of formulae—which would work out in a fashion equitable to all our pensioned classes and obviate the necessity for introducing year after year these ad hoc arrangements—Pensions Bills such as the one we have today. The Government would then know where they were going and the recipients of pensions would have some assurance and, in a fashion, also know where they were going.
Deputy Cosgrave mentioned that a pensions policy is in operation in some degree or other in many European countries. Inflation is a world disease and no doubt other countries have come up against the same difficulties as we have been encountering since the ninth round of wage and salary increases. They, too, have had to solve this problem in some fashion. Have we studied what other countries have done in this respect?
I asked a question yesterday and the reply I got shows, as far as I can judge, that in the Minister's Department there  is very little information available on pensions policies on the continent. If that is so, it is time the Government did a little homework and found out how other countries deal with their pension questions. It would be simple for the Government, if they are unable to do it themselves, to refer the question to the Economic Research Institute who would, I feel sure, gladly provide them in a month or two with all the necessary data on pensions policies obtaining elsewhere.
I would make that suggestion to the Minister. Meanwhile, we have to make do with this type of ad hoc arrangement, be it good, bad or indifferent. I realise the Minister has not got an endless purse, that he must think of Budget day. I cannot ask him now what concessions he will give to the farming community who cannot get pensions and yet who must bear the full rigours of inflation. All we can do is welcome the relief given in this Bill and hope the Minister will address himself to some more rational approach to the entire problem, some automatic system which would obviate the necessity for this type of perennial legislation.
Mr. P.J. Burke: Listening to the last speaker, I really could not tell whether he was in favour of the increased pensions or not. The situation in which pensioners can get increases depends on the prosperity of the nation. Thank God, the economics of the country have improved considerably, enabling the Minister for Finance to increase pensions accordingly. I welcome this Bill because it does what we all believe should be done—betters the lot of sections who need improvement.
I would refer to the suggestion that we should embark on a pensions policy similar to that used in some other country, and would suggest that the pattern obtaining in another country might not at all suit us here. The economic policy we have adopted during the past five years has succeeded in uplifting our people generally. As a result, the Minister is now able to bring in a Bill increasing pensions. Each section of our people is  anxious to get a little more in order to provide better facilities for sustenance. One section to which I should like to refer are the railway pensioners, quite a number of whom have passed on. There are still a number trying to exist on very small pensions. A Commission has been appointed and I do not wish to embarrass the Minister, pending the report of that commission. I should like to congratulate the Minister——
Mr. O.J. Flanagan: A proposal to increase pensions for the various types of people covered by this Bill is a very welcome measure and very desirable in present circumstances. If the Minister and the Government have embarked on a policy of ruthlessly and deliberately increasing the cost of living, it is natural that pensioners generally will be very seriously affected.
I make special reference to one section of pensioners, the widows of deceased members of the Garda, whose pensions I consider are miserably low. I have long felt that the Government should seriously consider the whole question of pensions for widows of Garda members, bearing in mind that the Garda Síochána are responsible for law and order and for the protection of life and property. Many of them lost their lives in the discharge of their duties. We have a number of widows in receipt of pensions whose husbands died in the performance of their duties. We also have cases of Gardaí who were killed by a accident while on duty. The rate of pension paid in such cases is miserably low and certainly does not enable the widows to live up to the standard to which they were accustomed in the lifetime of their husbands. A Garda's widow is expected to live up to a high standard. She must educate her children properly and that is no simple task at present.
 Therefore, I ask the Minister and, through him, the Government, to ensure that whatever provision is being made in the future in this matter of pensions, special sympathetic consideration should be given above all others to widows of the men who served this country so well, who have been custodians of law and order and who risked their lives in a number of cases carrying out their duties of safeguarding life and property.
The pensions that have been paid to the Gardaí themselves, I feel, could have been increased from the beginning. Some Garda pensioners are receiving very low rates of pension. Since a special case can be made for such people, the Minister should arrange to pay higher rates to Gardaí who retired on reaching the age limit or otherwise. When it was established, the Force had a very difficult task and for that reason I feel the Minister can present the Government with a set of very special circumstances regarding Garda pensioners. It is regrettable that a number of them retired before the rates of pay reached the present level and as pensions were based on the rate of pay they received at the time of retirement, many of them get very small pensions in comparison with what Gardaí will now get on retirement. In view of the limited number of these people, I think the rates for those who retired some years back should be brought up to the same level as would be applicable if they were retiring at present. A very strong case can be made for special attention for Garda pensioners.
The large number of retired civil servants has been very seriously handicapped by the ever-increasing cost of living. Whatever chance organised employees have, those in trade unions and so on, retired civil servants depend on their pensions, and are unorganised. They remind me very much of the present plight of the farmers. They got no increase but were expected to meet every increase in the cost of living. Some of those people have very limited fixed incomes and are very seriously hit by the continuing increase in the cost of living. The Minister should be  very sympathetic to their genuine claims and the reasonable appeals they have made for a very substantial increase in their pensions.
Deputy Burke rightly referred to the CIE pensioners. The Minister for Finance should be reminded of this matter. CIE pensioners are not covered by this Bill but we shall have an opportunity again of asking the Minister to do something about the very low rate of pensions they are paid.
I am glad that local authorities will be empowered to increase the pensions of retired local officials. This is most desirable because many local authorities have numbers of pensioners on their lists, gangers, overseers, nurses, dispensary doctors, those associated with engineering staffs and others who, like retired civil servants, have to bear the brunt of increases in the cost of living, in the price of bread and flour and every commodity they must buy. At the same time, they must meet substantial increases in rates on their houses and other increased costs that have become the order of the day in the past couple of years.
The amounts by which pensions will be increased under this Bill are, I think, still insufficient to afford a very great improvement in the pensioners' standard of living. I am sorry the Government in the past turned a blind eye and a deaf ear to reasonable appeals made by pensioners. It is high time to have a general review of the position and bring all our pensioners, especially those with no organisation or trade union to fight their case—and those are the people most seriously affected—up to a reasonable level. Very often these people make no protest and are prepared to suffer on, exercising greater economy in their homes. The Minister must be aware of the very special circumstances associated with the genuine pension claims of such people.
This Bill certainly goes some way towards alleviating some of the distress on the doorstep of many pensioners but if the Minister were serious in speaking of the great period of prosperity in which he says we now are, then the time must have arrived when we should be able to have a  general and substantial improvement in pensions.
I conclude by asking the Minister, having given special attention to the types of pensioners to whom I have referred, to bear in mind that there are special claims to be made for retired national teachers. Retired national teachers are a very special section of the pensioned community. They have given very good service to the country. The national school has been looked upon as the university of the poor. In recognition of the valuable contribution retired national teachers have made to the country, their pensions should be greatly increased. I make that plea on their behalf. I hope the Minister will bear in mind the special urgency associated with substantially increasing the rates of pensions of retired pensioners.
Mr. McLaughlin: Serious consideration should be given to the Garda who were unfortunate enough to be borderline cases when the generous increase was given to members of the Force. It is very disheartening to those men who joined in 1923 and 1924 that their age prevented them from remaining in the force until brighter days came along. They were the men who went through hard times to build up a good police force, and see that law and order were maintained, at a time when it was very hard to do so. Many of them retired a matter of a few weeks before the increase was given, and lost their increased pension and increased gratuity by a matter of days. I seriously ask the Minister to include as many of them as he possibly can. The Garda are not like other people. There was a time when a man would be removed from the Force if it were known that he had made any attempt to supplement his income by earning a few pounds. It happened recently in Dublin that a young Garda was pulled simply because he tried to supplement his income by earning a few pounds. I have met ex-civil servants and ex-CID men, and it is disheartening for them that their pensions give them so little on which to enjoy life. It is mere existence for the retired man and his wife. That is too bad.
 Local authority employees, county council gangers, county council supervisors, and so on, are looking forward to money being provided to give them pensions. In County Leitrim today, there are three men who are about to be retired. Those are the men who maintained the roads of the county when it was very hard to do so. Today we have good roads and we have only a limited number of gravelled roads. The task of maintaining the roads is not anything like it was in the past. The sooner the Minister makes provision for those people the better. Those three men are getting old, and they are going out now without any provision being made for them in their old age. They worked for about £1 a week before wages moved in a worthwhile way. We all hope to see our county council employees, from the road worker right up to the top employee, enjoying a pension which will leave them comfortably off in their old age.
There are borderline cases among the teachers, too. Some of them missed the increase by a matter of months, weeks or days. I ask the Minister sympathetically to consider all borderline cases, and to make the pensions retrospective so that the most deserving cases will be included.
Dr. Ryan: I want again to say I am sorry a copy of my speech was not supplied to the Opposition. Naturally I must take the blame for that because I should have seen to it. I hope I shall not neglect that courtesy again.
Deputy Sweetman said pensioners are the first to be hit by a reduction in the value of money, which is quite true. A reduction in the value of money is hard on any person living on what might be regarded as a fixed income. Therefore it is hard on pensioners when their pensions remained at a fixed level. Deputy Sweetman also said that in certain countries they have tried to remedy this position by increasing pensions pari passu with the cost of living. Another Deputy spoke of European countries increasing pensions pari passu with the increases in  salaries of the civil servants. I have been trying to get information on that, and I find it very hard to get any reliable information on what any country is doing. I am afraid no country has an out and out system of saying: “We will increase pensions exactly as the cost of living goes up,” or “We will increase pensions exactly as the salaries of the civil servants increase.”
Attempts have been made to meet the situation in a partial way, much the same as we have been doing here. Perhaps some have gone further than we have gone, but I think it would be true to say also that some have not gone as far. We must keep in mind that the whole concept of increasing pensions is of rather recent origin. The first increase in pensions was given in 1949, only 15 years ago. In the Civil Service, or in the State generally, we take longer to develop a proper pattern of things than can be worked out over a period of 15 years.
As I pointed out in my introductory speech, in the early increases we gave from 1949 to 1956, and to 1959 indeed, a bigger increase was given to lower paid people than to higher paid people and, of course, that increase going back over some years——
Dr. Ryan: That is right. In the last two increases dealt with in this Bill, there was a departure from that, and there is a system, if you like, of bringing them into relation with the retiring salaries of the times. First, we brought them up to before 1959, and on the last occasion, to the end of 1959. That brought them to the level civil servants had reached after the seventh round of increases in pay.
I have been thinking over this problem. Having brought State servants generally up to that level, we have to make up our minds what we will do in the future. It all depends, I need not say, on whether money is available, but supposing we had the money available, what should we do? I think that if we were able to say today, in the case of pensioners, that we would as circumstances arise increase their present pensions by some figure related  to the increased cost of living, we would have done as much as could be expected of the State for them. In other words, if a pensioner is retiring on a certain pension and if he is told: “Well, as far as possible we shall keep that pension up to the cost of living. We may lag behind by five or seven per cent for a couple of years but we shall keep some relation to the cost of living”, I think that would be as much as any pensioner could expect from the State and it would be a fair enough proposition.
I have often mentioned here before, especially in talking about State salaries and wages, that we have to have regard to what employers outside can afford. In this particular case we should have regard to that, too. It is all very fine for the State to come in and vote money to increase the pensions of existing pensioners but I cannot see how employers outside can do the same. We must remember that the bigger employers outside have built up a pensions scheme by putting so much into the pensions fund—so much is deducted from the employee and so much is put in by the employer himself—and that fund will actuarially be sound on the grant of a certain pension. But now these funds will no longer be sound if it is expected that they should increase the pension of those who have already gone out. In fact, it would be difficult for them to keep their funds sound by giving increased pensions to those going out in the future, not to speak of those who have gone out in the past. I do not know how employers will get over that difficulty which is there. We shall have to keep in mind, with State pensioners, that that difficulty is there for everybody else, whatever about the State itself, and we have to have sympathy, as it were, for these employers.
Deputy Sweetman asked why it was that in certain cases we paid these pensions on the authority of the Dáil giving us a Supplementary Estimate. I believe that legally, or perhaps more in practice than in law, it has been customary to pay out on the authority of a Supplementary Estimate. That is, I believe, all right as far as voted services are concerned, but I am told that  in the case of pensions on the Central Fund, it is a different matter and requires legislation.
Dr. Ryan: Deputy Costello said that the pension of a civil servant was regarded as deferred pay and that, on that basis, increases should be given pari passu with the increased pay of serving officers. I have been told that the old legal theory of pensionable service was that it was an act of grace; that there was no right whatever to it by law and that it was just given as an act of grace. I do not know if even a civil servant at the moment has a legal right to a pension. Certainly, no legislation, as far as I know, was passed to give them the legal right to a pension.
Deputy Costello also spoke about injustices to a pensioner retiring, say, in 1962 and having, say, £120 less than his colleague who is retiring now. That is an anomaly. I do not know whether or not one would call it an injustice. At least, the man got what he was promised and was entitled to when leaving the service at that time. We cannot be accused of being entirely hardhearted in this matter, considering that we have increased our expenditure on pensions over the past two years by £1.1 million, which is a fair amount out of a total of £8.4 million.
Deputy Corish spoke of the delay in paying pensions. I think there were some delays with the local authorities. Under this Bill, the local authorities have authority by regulation to pay pensions. Some of them, I think, were rather doubtful about their legal  authority to pay, pending the passage of this Bill. Most of them did pay and I am not sure that all did not come up to scratch in the end but I know there was some delay for some time. There will be no further delay when this Bill passes.
Deputy Cosgrave spoke of the practice in a number of European countries to which I have referred and went on to say that the pensioners and those on fixed incomes generally got no benefits, as the Social Welfare people did, in order to cover their increased costs under the turnover tax. That is not true because in last year's Budget one of the measures which I mentioned was an increase in State pensions in order to cover those pensioners against the increase in the turnover tax. As a matter of fact, the average increase in pensions in 1963 was about four per cent and the average increase in the cost of living we find from the mid-August figure, which was the one before the turnover tax came into operation, and the mid-February figure was about three per cent so that they have been covered as far as that is concerned.
I think Deputy Cosgrave also said he felt we should have a better scheme of pensions for the widows of civil servants. My colleague, Deputy Sweetman, brought in an Act in 1956 which gave a civil servant the right to opt to have his own pension reduced but provision being made for his widow if he should pre-decease her. It has not been adopted by very many people, unfortunately. I do not see, at the same time, why I should be expected to look after these widows when the husbands themselves are not doing it, as they are not, under the 1956 Act.
It should also be mentioned, perhaps, that where a civil servant dies leaving a fairly young widow, if he and she were drawing children's allowances, these children's allowances continue so long as the children remain within the age limit under which these allowances are payable.
Dr. Ryan: The story is prevalent, and I am told it has done a lot of harm, of a man who opted to make provision for his widow who died the next day and he lost half his pension and lost on the transaction. Of course, that is not general. However I should have thought, I would say, when that Bill was being passed, that many civil servants would avail of it but I am not sure there are many——
Dr. Ryan: Deputy Barry showed his sympathy for me in my dilemma of finding the money but, after showing his sympathy, he went on to say I ought to do all I possibly could for these pensioners. Deputy Hogan joined with Deputy Barry in talking about inflation at the moment and the difficulties created for pensioners because of that. Deputy Hogan said he asked me a question as to what would be the cost of bringing all State servants up to the level of those retiring now and that I said I could not give him the information. Of course, I could not give accurate information. To do so, one would have to go back over each pensioner. There are so many different grades and so many different rates of pay, and so on, that there is just no general way of making such a calculation. One could not even do it with a computer because it would take months to feed the computer with the various data. I could not, therefore, give an answer to the Deputy's question.
However, the Deputy could himself make a rough calculation when I tell him there was an eighth round increase of from 14 to 16 per cent and a ninth round increase of 12 per cent. That makes about 27 per cent in all. That will give some idea of what the cost would be because, roughly, if a civil  servant retires with 12 per cent more, and he has full service, he gets half his salary by way of pension, and the pension, of course, would have to be increased by 12 per cent to bring it into parity. Those are the figures on which to make the calculation.
The Deputy also asked what would be the cost of bringing pensions up on a cost of living basis. The cost of living has increased by about 14 per cent since pensions were increased to the 1959 level. From 1959 then to the present time, the cost of living is about 14 per cent up. It must be remembered, however, that those who retired last year and those who retire this year would not need the same lift as those who retired four or five years ago. I mention this data to give Deputies an opportunity of making some shot at this calculation for themselves.
Deputy Flanagan talked about the Garda. Why, I do not know. They have not been any worse treated than anyone else. I think, perhaps, they make a bit more propaganda about their case. Possibly that is what has impressed Deputy Flanagan. The pensions in their case have been brought up to the 1959 level, too, and the widow of a Garda gets a pension. That does not apply in the case of other State servants. Another point is that if a Garda serves 30 years, he gets a full pension. Other State servants must serve 40 years to qualify for full pension. I am not finding fault, of course, with the good treatment the Garda get, but I would like to assure Deputy Flanagan and others that the Garda have been justly treated as compared with civil servants, teachers, and others. They have got everything to which they could legitimately claim they were entitled from the point of view of pension.
Deputy McLaughlin made a plea on behalf of hard cases. Of course, hard cases occur. That is inevitable. It cannot be avoided. A man is due to retire on a certain day and goes out. There is a 12 per cent rise and a colleague, who retires a week later, gets a higher pension because of that increase. No matter what one does, there will always be this division. It is just as equitable to draw the line on the  day the increase is given as it is on any other date. I do not see any way out of the difficulty. With a good system of gradual improvement, either from the point of view of parity or on a cost-of-living basis, the gap may be narrowed. Indeed, as things are, pensions after a year or two tend to get closer together. That seems to be the best we can do at the moment.
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