Dáil Éireann Debate, Tuesday - 4 November 2014
360. Deputy Aengus Ó Snodaigh asked the Minister for Public Expenditure and Reform if there is an end date for the emergency financial measure introduced in 2009 on members of public service pension schemes, the pensions related deductions tax; and if the percentage charged on under €60,000 will be lowered and the exempted income be increased to reduce the burden on the lower paid public servants. [41974/14]
View answerThe powers granted by the Oireachtas under the Financial Emergency Measures in the Public Interest (FEMPI) Acts are temporary in nature and are predicated on the existence of a financial emergency in the State. In the course of my 2014 annual review, submitted to the Oireachtas, of the FEMPI measures impacting on public service pay and pensions, I concluded in June this year that it was necessary to continue to apply those measures, including the public service Pension-Related Deduction (PRD).
PRD is a progressively structured reduction to the pay of pensionable public servants ensuring that those on higher remuneration rates are impacted more adversely than those on lower pay. It raises of the order of €900 million per year and is therefore a critical component of the public service pay and pension measures adopted as part of our national fiscal consolidation. However, it should be noted that a start has already been made on ameliorating 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 in a year fell from 5% to 2.5% on 1 January 2014. This 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.
