§ Mr. Blackburnasked the Chancellor of the Exchequer whether it is proposed to adjust pensions and sick pay benefits of civil servants, teachers, the Armed Forces, police, firemen, local government officers and other State servants when they become eligible for retirement pension and sickness benefit under the National Insurance Act, 1946.
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§ Mr. DaltonYes. Under existing arrangements, State servants have, in general, been excepted from national insurance for pensions and sick benefits, and have received equivalent benefits as part of their conditions of service. The new national scheme, however, will be universal and having regard to the substantial contributions to be paid both by employers and employed persons under that scheme, it is clearly necessary that occupational schemes for pensions and sick benefits should be reviewed both in relation to the total payments to be guaranteed to the beneficiaries, and with regard to the contributions from the employer, and in many cases from the employed persons also, which are necessary for maintaining the additional benefits under the occupational schemes. Section 69 (4) of the National Insurance Act accordingly enables occupational schemes for the provision of pensions or other benefits to be modified when the national scheme comes into force.
The Government, therefore, propose that the Superannuation Act pensions of future entrants to the established Civil Service, and the retired pay and pensions of future entrants to the regular Armed Forces should be adjusted when they reach the age at which they will be eligible for the national insurance retirement pension so as to avoid duplication of benefit under both an occupational and the national scheme. The reduction in occupational pension will not exceed the standard rate of national insurance retirement pension for a single man, viz. 26s. a week, and will be correspondingly less when the occupational pension is only in respect of part of the individual's normal working life. Existing; established civil servants and regular members of the Armed Forces will retain their eligibility for present scales of occupational pension in addition to any National Insurance retirement pension for which they may qualify as a result of their contributions. Broadly similar action is proposed in regard to the contributory pension schemes of the other services referred to in the Question, except that in these cases the contributions of employers and employee would both be adjusted to take account of the reduced occupational pension that will be available 207W to future entrants. It is proposed that those already within such pension schemes should be given an option to continue on the present basis of contribution and benefit.
Similar considerations apply to sick pay, and the Government accordingly propose that rates of sick pay in the Civil Service and the other civilian services should where necessary be adjusted; both for existing staff as well as for future entrants to ensure that sick pay when 208W added to sickness benefit or injury benefit under the National Insurance Act does not exceed ordinary pay. It is not, however, proposed to adjust rates of sick pay or ordinary pay on account of any disablement benefit under the National Insurance (Industrial Injuries) Acts which the individual may be receiving.
Consultations are taking place with representatives of the local authorities and of the staffs concerned on the application of these principles.