Wednesday, 7 November 2001
Dáil Eireann Debate
7. Mr. Ring asked the Minister for Social, Community and Family Affairs the number of persons who have had their State pension reduced due to their British pension; the way in which this deduction is calculated; and the exchange rate which is used in this calculation. [25455/01]
19. Mr. Cosgrave asked the Minister for Social, Community and Family Affairs the total number of pensioners who are in receipt of a UK pension payable through his Department; if his Department is currently reviewing this category of pensioners in view of exchange differences between sterling and the punt; and if he will make a statement on the matter. [26860/01]
Over 106,000 pensioners receive an Irish non-contributory old age or survivor's pension, of which 10%, some 10,300 people, also receive a British retirement pension. The contributory British pensions are paid directly to the people concerned by the British Department of Social Security and not through my Department. The British pensions are less than the maximum rate of old age non-contributory pension payable in this country. The people concerned are therefore entitled to an Irish pension to, in effect, top up their British pension to the level of the Irish non-contributory pension. As with any other pensioners resident here, they have full entitlement to various free schemes, such as living alone and fuel allowances, depending on their age and household circumstances.
A pensioner's means from all sources are taken into account when determining the rate of old age pension. If the pensioner has a British retirement pension, the current value of that pension in sterling is first determined. The sterling value is then converted to Irish punts via euro, using the exchange rate that prevailed at the time of the most recent increase in the British pension or the rate of exchange in subsequent quarters, whichever is most beneficial to the pensioner. Once awarded, the rate of old age or survivor's pension payable to people with British pensions has to be adjusted for changes in the rate of the British pension or changes in its value as a result of exchange rate movements. Deputies are aware that it is a legal obligation on pensioners to notify the Department in the event of changes in their means.
Pensions are reviewed by my Department as part of an ongoing review and control programme. The current review arose in the context of implementing improvements introduced in the 2000 budget in the assessment of capital for non-contributory old age and survivor's pensions. That involved the exemption of the first £10,000 of capital for pension purposes, compared to £2,000 as it used to be, and was of significant benefit to 23,000 pensioners.
In reviewing means for the purpose of implementing this measure in individual cases, it was necessary to undertake a complete means review. Some 7,000 of the old age pensioners concerned had, in addition to the capital, means from other sources, particularly a British retirement pension, and the value of such pensions had to be taken into account. The Department subsequently undertook a complete review of all cases with income from similar sources. In this context, 5,600 pensioners with British pensions have had their Irish pension entitlement reassessed to date. Of these, 3,501 pensioners, 62%, have had their old age pensions reduced due to increases in their means; 112 pensioners, 2%, had  their pensions withdrawn as their means exceeded the statutory limits for entitlement; 1,720 pensioners, 31%, experienced no change and a further 283 pensioners, 5%, received an increase in their Irish pensions. In the context of the reviews, British pension is assessed using the sterling to euro rate of exchange either at the date of the last increase in British pension or the rate of exchange in subsequent quarters, whichever is most beneficial to the pensioner.
It is open to any pensioner to request a review at any time in the event of a reduction of means due to currency fluctuations or for any other reason. The Department carries out 2,000 pension claim reviews routinely per year, about three-quarters of which are undertaken at the pensioners' request. Of these reviews 40% result in an increase in pension rate with a further 35% resulting in no change. The balance of 25% of these reviews result in rate reductions or cessation of entitlement in cases where pensioners have significant increases in other means. Where a review results in a change in pension rate, the pensioners concerned have the normal right of appeal to the social welfare appeals office. As Deputies are aware, under social welfare legislation individual decisions relating to claims are made by deciding officers and appeals officers. These officers are statutorily appointed and I do not have a role in making such decisions.
Mr. Ring: This has been the meanest attack on the elderly since the Minister took office. More than 10,000 people have English pensions and part Irish pensions. The Minister deliberately targeted these people.
Mr. Ring: A question is coming if you give me a chance. Some 2,000 people were randomly checked across all schemes; 5,000 people on this scheme were checked this year. The Minister targeted them. Some 3,600 people have lost money. These people left the country in the 1930s, 1940s and 1950s and they earned their money through hard work. Why can the Minister not leave them alone? What did he do for them when sterling was weak? How much money did the Department give them? Why did the Minister not wait until the new people came into the scheme instead of taking money off old people and upsetting them? I have never before met so many old people who are upset by a Government decision.
Mr. Ring: How much did the Minister give these people when sterling was weak? Why does the Department calculate the rate of sterling at  the beginning of the year? It should be done on a weekly basis.
Mr. D. Ahern: Given that there are 106,000 pensioners, of which a proportion are in receipt of foreign pensions, the Department could not calculate it on a weekly basis. They do it on a quarterly basis and in accordance with EEC regulation, Article 107, EC574/72, on social security for migrant workers. It is exactly the same mechanism for conversion. In all cases consideration is given to benefit those people in terms of the exchange.
Mr. D. Ahern: I did not tell my officials to go easy on any individual or group of individuals. It is a matter for the civil servants in my Department to investigate people in relation to their entitlements.
Mr. D. Ahern: Substantial improvements, which were called for by the Opposition in relation to capital assessment for means tested payments, were made. Deputy Jim O'Keeffe claimed credit for that, although it was the Government which did it.
Mr. McGinley: I am sure the Minister agrees it is a traumatic experience for old age pensioners, many of whom are in their 70s and 80s, to have their weekly Irish pensions reduced as a result of this assessment by anything up to £50 or £60 per week. I know old couples in their 80s in Donegal whose pensions have been reduced by £58 per week.
Mr. McGinley: It is a traumatic experience,  particularly when it is based on an exchange rate which can fluctuate. Was the Department as assiduous in compensating these pensioners when the shoe was on the other foot and the pound was worth more than sterling? The Minister said it is based on the exchange rate and on interest rates.
Mr. D. Ahern: No couple would have lost out by £50 as a result of exchange rate fluctuations. They might have lost out because they did not inform the Department they had a British pension or that the British pension had been increased.
Mr. D. Ahern: My Department officials and I, as the Minister, are responsible to this House and to the committees of this House. This issue was raised by the Comptroller and Auditor General because reviews of non-means tested payments, particularly in relation to pensioners, had not been carried out since 1992. As a result of the changes we made, which were asked—
Mr. McGrath: Does the Minister agree these are not migrant workers but are mostly Irish citizens who were forced to go abroad in the 1940s and 1950s because there was no work here? The Department normally reviews approximately 2,000 pensioners. Does he agree that a direction has been given when 5,600 people in a particular group are reviewed in one year? These people have British pensions with a top-up Irish pension. Two-thirds of those people suffered decreases in their pensions. Does the Minister conclude that this group was specifically targeted by the Department and that it is mean to do so?
Mr. D. Ahern: I did not call any pensioners “migrant workers”. The mechanism we used for the conversion is the same as that used to convert any other social welfare payment for a person who is claiming under social welfare codes here or abroad. The mechanism is Article 107 of the Council Regulation EEC574/72, which relates to social security for migrant workers.
Mr. D. Ahern: The changes we made, which were called for by the Opposition, were of benefit to 23,000 means tested pensioners and, as a result, the Department decided to conduct a review of  all pensioners, including those who were in receipt of a British pension.
Cecilia Keaveney: Some people who have made representations to me have lost out because of the exchange rate was 1.24. The exchange fluctuates wildly, even when pensioners have taken the letter that issues from the Department to the bank on the same day they receive it. Does the Minister agree it is difficult to have an exact changeover?
Every 13 weeks British pension holders receive payments. Is it provided for that they do not receive a weekly pension? They must lose out in terms of interest between weeks one and 13. Are they given credit as a result?
The letter that issues from the Department states the individual is entitled to £10 less and his or her living alone allowance. Some pensioners think they have lost the living alone allowance on top of the deduction. Will the Minister ensure the letter is clearer because people are convinced they have lost their living alone allowances?
Mr. Crawford: No issue has caused as much concern for those who were forced to emigrate from the State during the 1950s and 1960s when there was no work for them. Many have returned here to set up home so that they would be nearer their families, yet they find themselves subject to an inquisition and are put under severe pressure. To what use has the Minister put the savings he has made? Were they used for more public relations?
Mr. Crawford: As one of the Members in this House, along with Deputy Jim O'Keeffe, who pushed the issue of the interest rate change, I take exception to this group of people being used to pay for the change or for public relations.
Mr. D. Ahern: I assure the Deputy his assertion is incorrect. As a result of the beneficial changes we made, and because it had been indicated by the Comptroller and Auditor General that in certain cases reviews had not been carried out since 1992, it was necessary to carry out reviews. People lost out because they did not comply with the obligation on every person in receipt of a means tested payment to inform the Department of his or her change in circumstances.
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