Maria Byrne (Fine Gael)
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I welcome the Minister of State to debate my question relating to the public service. Many of us have been out meeting people and it is an issue I have been coming across on the doorsteps. While €12 was very welcome for pensioners in the budget, retired public servants have €12 deducted from their public service pension so that they do not get a €12 increase. I have come across many people who are affected by this and I understand up to 30,000 people are being affected by this change. There is an old system and a new system. I do not know what year it started. While it sounds great that people have got €12 they are not getting it because they are losing it on the other hand. Is there any way to resolve this? There are older people on a pension and the cost of everything is going up, including groceries, heating, but nothing is coming down. That €12 would make a great difference to many of these people.

Alan Dillon (Mayo, Fine Gael)
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I thank Senator Byrne for raising this important matter. I am taking this on behalf of the Minister, Deputy Donohoe who has responsibility for public expenditure and I will bring back the Senator’s concerns.

Defined-benefit public service pension schemes for fully-insured employees paying class A PRSI are integrated with their social welfare entitlements which means that the overall pension package within these schemes has both an occupational pension benefit and a social welfare benefit component. On retirement, the combination of occupational pension and social welfare benefit equate to the total package payable under the design of the integrated scheme.

Pensioners who were members of integrated pension schemes will receive a benefit from any increases in State pension rates that may occur post-retirement, since they then receive the higher rate of social welfare in addition to their occupational pension. As well as benefiting from social welfare increases, public service pensioners also benefit from wage-indexation of their occupational pensions under the current public service pay deal, whereby increases in public service wages are passed on to public service pensions.

Non-integrated public service pension scheme members are generally those employed before 1995 who paid modified PRSI rate contributions that are not reckonable for a full standard contributory State pension, so changes to social welfare rates do not affect their pensions in the same way.

Maria Byrne (Fine Gael)
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I understand the Minister of State is here to represent the Minister for public expenditure. I understand what the answer is saying but it does not answer how or why these people are affected. I am asking if any changes can be made so that these people will benefit from any increases. It sounds good but people who worked in the HSE, councils, hospitals or in local authorities and many different public service areas are all affected. Can anything be done to address this? They should be entitled to the increase. I understand that some were not paying the full rate of PRSI, they are retired and they are pensioners and many are in their 70s and 80s. The cost of everything has gone up, as I have said. I would ask that the Minister of State take this back to the Minister for public expenditure.

Alan Dillon (Mayo, Fine Gael)
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The Senator’s arguments which she presented here are fully valid about those who feel less well-off about any budgetary measures around the State pension. It is not directly linked to their level of income after retirement and they do feel aggrieved about that. However, as part of the public service wage indexation, they do benefit from any additional public pay sector deals which may have a positive impact on their pensions.

The integration of defined-benefit public service pension schemes with social welfare entitlements plays a crucial role in safeguarding the financial well-being of retired public servants. We cannot take away from the enormous service many have given to this State and they should be supported. The approach we take ensures that pensions that are fully insured under class A PRSI can benefit both from their occupational pensions and State pension enhancing their overall retirement income.

The system is designed to provide a fair and equitable framework. I will bring the matter back to the Minister. It is important that it is raised again in terms of fairness where pension adjustments reflect changes in the State pension rate and provide stability for retirees.Even in the past two budgets, this Government has increased the pension by €24, with an increase of €12 in each budget cycle. That has been of enormous benefit to those who are still being challenged with the cost-of-living measures. As increases are made in social welfare provisions, it is vital those increases flow to the public service pension in order that retired public servants enjoy the benefits of their service without the fear of a reduction in their overall income. As I said, the wage indexation of occupation and pensions under the current pay deal reinforces that commitment.

Maria Byrne (Fine Gael)
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I thank the Minister of State.