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Dáil Éireann díospóireacht -
Thursday, 7 Mar 2002

Vol. 550 No. 2

Written Answers. - Pay Increases.

Seán Haughey

Ceist:

225 Mr. Haughey asked the Minister for Finance the pay increases scheduled for 2002 under the programme for prosperity and fairness; if these apply to the private sector; the income tax and levy changes for 2002; and if he will make a statement on the matter. [7872/02]

The terms of the pay agreement are contained in annexes I and II of framework I of the Programme for Prosperity and Fairness as adjusted in December 2000, in accordance with which the following increases are payable in 2002:

Public Service:

4% of basic pay for the last nine months of the agreement to be paid not earlier than 1 October, 2002, subject to certain requirements in relation to performance indicators and sectoral targets as set out in Annex II ,

A non-pensionable once-off lump payment equal to 1% of basic pay, under the December 2000 adjustment, will be paid on 1 April 2002.

It has also been agreed that one quarter of any increases recommended by the benchmarking body will be paid with effect from 1 December 2001 with the implementation of the balance to be negotiated on receipt of the report.

Private Sector:

4% of basic pay for the last nine months of the agreement, as it applies in each particular employment or industry,

A once-off lump sum payment equal to 1% of basic pay as it applies in each particular employment or industry to be implemented on 1 April 2002.

The pay agreement commits the parties to full and ongoing co-operation with change, flexibility and to increasing productivity taking full account of the implications for competitiveness and employment.

Income Tax ChangesAs regards the income tax changes for 2002, the level of personal taxation may be influenced by movement in any or all of the following – income tax rates, income tax bands and income tax credits. budget 2002 made no change to the rates of income tax which remain at 20%, standard rate, and 42%, higher rate.
For 2002, the standard rate band for a single person has increased from €25,395 to €28,000 per annum. The band for a two-earner married couple has increased from €50,790 to €56,000 with a maximum transferable band of €37,000 between spouses, increased from €36,823. For one-earner married couples, the standard rate band has increased from €36,823 to €37,000.
In relation to the basic income tax credits, the personal credit has increased from €1,397 to €1,520 single and from €2,794 to €3,040 married. The employee, formerly PAYE, credit is increased from €508 to €660. The new amounts in respect of other credits which were changed in budget 2002 are set out in the budget booklet, page B5et seq. There were no levy changes for the employee in budget 2002 although the PRSI contribution ceiling has increased from €35,870 to €38,740.
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