PENSIONERS (Ex gratia allowance)

Mr J. F. Conceicao asked the Minister for Finance if the Government will give consideration to raising the cost of living allowance of pensioners, to allow them to meet present inflationary conditions; and if the Government will also consider referring the case of pensioners to, say, the National Wages Council for periodic adjustments of their pensions.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I am happy to announce that Government has decided to grant with effect from 1st April, 1974, an ex gratia allowance to assist pensioners in difficulties in the present abnormal inflationary situation. The ex, gratia payment, to be termed the new Singapore Allowance, will he confined to pensioners resident in Singapore, whose total pension is less than S650 per month and who will have retired before 1st April, 1974.

Pensioners whose total pension is $100 per month or less will receive an allowance equal to 50 per cent of their pension, subject to a minimum of $15 per month or a maximum of $30 per month. Those whose pensions are above $100 per month but below $650 per month will receive a flat rate of $30 per month, subject to a maximum gross pension of $650 per month. Pensioners with mixed service now resident in Singapore will be paid half the rate. To ascertain total pension, basic pension plus existing Singapore Allowance and Cost of Living Allowance will be aggregated and rounded upwards to the nearest dollar.

The new Singapore Allowance will also be payable to widows who receive a dependants' pension from the Singapore Government provided they are in receipt of the pension as a result of service put in by their deceased husbands. Persons in receipt of an Injury Allowance which itself is subject to review will not be paid the new Singapore Allowance. Persons who have been retired on disciplinary grounds with reduced pension, other than on grounds of indebtedness will also not be eligible. In order to alleviate the hardship of those retired on account of indebtedness, it has been decided to include them for payment of the allowance.

On this basis, about 4,000 pensioners will receive the new Singapore Allowance. This will cost the Singapore Government $1.1 million per annum and represents an 11 per cent increase in the pensions bill.

I would like to stress that this ex gratia allowance to pensioners resident in Singapore is not in any way to be linked with the NWC award for workers. Whereas the NWC award is really a form of supplementary wages to workers which takes into account the performance of the economy and our competitive position in labour costs and productivity, this special ex gratia allowance to pensioners is based on entirely different considerations. Regard was had to the unprecedented rise in the cost of living, particularly in the financial year that is about to end. However, there will not be periodic adjustments. It would be totally inappropriate to refer the matter of payment of pensions to the NWC for consideration. Pensions are paid as a result of pensioners having qualified under their agreed terms of service with the Government.

Mr Sia Khoon Seong (Moulmein): Mr Speaker, Sir, on the basis of equity, will the Minister for Finance consider allowing pensioners, who had retired prior to the implementation of the recommendations of the Harvey Commission in 1969, to consolidate the then cost of living allowance into the basic salary? If so, these pensioners would then be able to recompute their pensions based on their last drawn salary revised to incorporate their former basic salaries and cost of living allowance, just as though it was one consolidated salary?

Just to refresh the memory of the Minister, before the Harvey Commission's recommendations were adopted in 1969, there was a basic salary and a cost of living allowance. After 1969, the basic salary and the cost of living allowance were consolidated into one single basic salary. Therefore, the last drawn salary of those pensioners who retired before 1969 would be only the basic salary, and those who retired after 1969 would have the last drawn salary as the basic salary plus the cost of living allowance. There is this difference. On the basis of equity, will the Minister' consider allowing those pensioners who retired before 1969 to recompute their pension?

Mr Hon Sui Sen: Mr Speaker, Sir, that is another question. It is totally unrelated to the present question.