Dáil Éireann Debate, Tuesday - 30 January 2018
189. Deputy Micheál Martin asked the Minister for Public Expenditure and Reform the arrangement and future plans to allow public servants to continue to work after their retirement; if they will be put at a financial disadvantage or if they will be allowed to earn the same salary as they were earning prior to their retirement date; and if they will be taxed differently. [4600/18]
View answer195. Deputy Martin Heydon asked the Minister for Public Expenditure and Reform the status of a person (details supplied) who is due to retire in April 2018 at 65 years of age but would like to remain working; and if he will make a statement on the matter. [4003/18]
View answerI propose to take Questions Nos. 189 and 195 together.
The Government agreed on 5 December 2017 that the compulsory retirement age of public servants recruited before 1 April 2004 should be increased to age 70. Primary legislation will be required for the changes to be implemented. In approving the proposals, the Government also approved the General Scheme of a Bill to give effect to the changes. The Attorney General’s Office has been asked to give priority to the drafting of this legislation so that the new compulsory retirement age for pre 2004 public servants will become effective as soon as possible. The new compulsory retirement age will only apply to pre 2004 public servants who reach the age of 65 following the commencement of the new legislation.
In the meantime, the Government has approved some limited interim arrangements to apply in the period between the Government Decision and the commencement of the necessary legislation. The interim arrangements (which have to respect the current statutory position of the compulsory retirement age of 65) through retirement and re-hire, will allow pre 2004 public servants who reach the age of 65 in that period to remain in employment only until they reach the age of eligibility for the State Pension (Contributory), which is currently 66. Details of how these interim implementation arrangements will operate in the wider public service, including in the education sector, have been put in place by the individual sectors.
The policy across the public service is that, where a retired employee is re-hired, they are paid at the minimum point of the relevant scale, rather than at the pay point they had reached when they retired. This practice is continuing in the context of the interim arrangements. Pension abatement rules will, however, apply in the case of a public servant availing of the interim arrangements. Pension abatement means that the pension that has been awarded will be reduced so that the person concerned will not receive more in combined pension and salary payments than they would have received if they had remained working. Given that the person's "new" salary will be at the minimum point, there will be room through the payment of pension and the “new” salary rate so that the sum of the “new” salary rate and the pension in payment can address the difference between the minimum point of the scale and the pay point they had reached when they retired. Taxation is a matter for the Revenue Commissioners and is applied to all taxpayers in accordance with statutory provisions and Revenue Commissioners rules and procedures.
It is not intended that the practice of payment at the minimum point would apply to public servants who choose to remain beyond the age of 65 once the legislation is commenced. Those public servants will not be in the position of having retired and been re-hired. It is intended that when the legislation is enacted, it will allow for the retention of public servants who reach the age of 65 following the commencement of the legislation, on current terms and conditions.
