I propose to take Questions Nos. 167 and 168 together.
The new public service pension related deduction will apply to the remuneration received by a public service employee at the rates announced on 3 February 2009.
Public Servants paying the new pension contribution will be treated for tax purposes in the same way as those making pension contributions in the private sector. Contributions will be deducted from gross pay by employers before income tax, PRSI and health levies are calculated. Thus, pension contributions will be effectively relieved of tax at the marginal rate.
The income levy on the other hand is payable on gross pay, before account is taken of pension contributions or capital allowances.