Wednesday, 4 June 2014

Questions (18)

Joan Collins

Question:

18. Deputy Joan Collins asked the Minister for Public Expenditure and Reform when the PRD or pension levy, introduced in 2009 via the Financial Emergency Measures in the Public Interest Act 2009, will be abolished or revised to exclude workers earning less than €60,000 per annum. [23651/14]

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Written answers (Question to Public)

The public service Pension-related Deduction (PRD) was introduced in March 2009 under the Financial Emergency Measures in the Public Interest Act 2009. PRD is a progressively structured multi-band reduction imposed  on the pay of pensionable public servants. 

PRD continues to be a critical component of the public service pay and pension measures adopted as part of our national fiscal consolidation. Across all sectors of the public service, and based on the current PRD rates structure, it is estimated that the deduction raises in the region of €950 million per year. A large proportion of this revenue would no longer accrue to the Exchequer if PRD was abolished or no longer applied to persons earning less than €60,000 per annum. In these circumstances, that revenue would have to be raised through other means in order to maintain our necessary fiscal consolidation targets. Nevertheless, a start has been made in relation to the amelioration of the impact of PRD on public servants. As legislated for in the Financial Emergency Measures in the Public Interest Act 2013, and as provided for in the Haddington Road Agreement, the rate of PRD on the €15,000 to €20,000 band of pay received fell from 5% to 2.5% on 1 January 2014. This rate cut is worth €125 annually in gross terms to most public servants, with those taxed at the standard rate enjoying the greater gain in terms of take-home pay boost.

I should also point out that I will be reviewing PRD, as part of my overall annual review of the wider set of emergency fiscal measures introduced under the Financial Emergency Measures in the Public Interest Acts 2009-2013. This review arises under section 12 of the Financial Emergency Measures in the Public Interest Act 2013, and I am required to cause a written report of my findings to be laid before each House of the Oireachtas. As part of that review I must 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.