On 2 December 2010, the Government approved the reduction by 10% of the salary scale and fixed allowances for new entrants to traditional recruitment grades in the public service, with effect from 1 January 2011. This was to achieve a medium-term structural reduction in the cost of the public service and gave effect to a commitment in the National Recovery Plan.
Therefore, this reduction was not applied to staff of the Health Service Executive alone. This measure is one which applies to all newly entrants at traditional recruitment grades across the entire public service. The reduction was targeted at grades where there is a preponderance of recruitment from external sources, so as to limit the effect on existing staff. As it happens, the vast majority of such grades are those of basic, entry-level grades. It should be noted that individuals currently employed in public health service in these basic, entry-level grades or new recruits who have previously worked in the same or similar grade in the public service are exempt from this reduction. The impact of this pay reduction is quite limited, given that the moratorium on recruitment continues to be in place and there is little external recruitment being undertaken either within the public health service, or across the wider public sector.
With regard to the pay of senior staff in the public health service referred to by the Deputy, staff in these grades were subject to the earlier pay reductions in January 2010, as provided for under the Financial Emergency Measures in the Public Interest (FEMPI) no. 2 Act, 2009, along with all other public servants. The Act was introduced in the context of the priority to be given to the stabilisation of the public finances and its purpose was to achieve a reduction of approx €1bn in the public service pay bill in 2010. Public Service salaries of up to €125,000 were reduced by the following:
5% on the first €30,000 of salary;
7.5% on the next €40,000 of salary; and
10% on the next €55,000 of salary.
This produced overall reductions in salaries ranging from 5% to just under 8% in the case of salaries up to €125,000. This was a progressive, measured reduction which provides that those that have higher salaries will contribute more. This resulted in reductions of 8% on all salary for persons with salaries from €125,000 to less than €165,000; 12% on all salary for persons earning from €165,000 to less than €200,000; and 15% on all salary for salaries of €200,000 or more.