Thursday, 17 April 2014

Questions (102, 103)

Marcella Corcoran Kennedy

Question:

102. Deputy Marcella Corcoran Kennedy asked the Minister for Public Expenditure and Reform in view of the fact that the public service pension deduction was intended to be a temporary measure, his plans to reduce or abolish the levy; and if he will make a statement on the matter. [18344/14]

View answer

Pat Deering

Question:

103. Deputy Pat Deering asked the Minister for Public Expenditure and Reform the new pensions levies for public servants that have been introduced in the past ten years; and if any of these levies are due to expire in the near future. [18518/14]

View answer

Written answers (Question to Public)

I propose to take Questions Nos. 102 and 103 together.

Implemented in March 2009 under the terms of the Financial Emergency Measures in the Public Interest Act 2009, the public service Pension-related Deduction (PRD) is the only pension-based levy on the pay of serving pensionable public servants which has been introduced over the past 10 years.

The PRD forms part of a wider set of emergency financial measures, introduced by way of legislation over the period 2009 to 2013, which have had a significant downward impact on the pay and pensions of current and retired public servants. These measures, including the PRD, have been vital in securing the financial survival of the country, and they continue to provide critical support to the national budgetary position and to the attainment of our fiscal targets. The PRD is particularly important in this regard, raising in the region of €900 million annually for the public finances at current rates.

Under section 12 of the Financial Emergency Measures in the Public Interest Act 2013, I must review the PRD and other financial emergency measures annually and cause a written report of my findings to be laid before each House of the Oireachtas. As part of that review I am required to consider whether the measures continue to be necessary having regard to the purposes of the legislation, the revenues of the State and State commitments in respect of public service pay and pensions. My next such report will be laid before the Houses of the Oireachtas by 30 June 2014.

I should also point out that I have already acted to reduce the burden of PRD on individual public servants, albeit in a limited way. As committed to under the Haddington Road Agreement, and as legislated for in the Financial Emergency Measures in the Public Interest Act 2013, the rate of PRD on the €15,000 to €20,000 band of a public servant's annual pay was cut from 5% to 2.5% with effect from 1 January 2014. This rate cut is worth €125 annually in gross terms to most public servants, with persons taxed at the standard rate enjoying the greater gain in terms of take-home pay.