Brian Cowen (Laois-Offaly, Fianna Fail)

The REV will take account of the changes relating to the decision taken yesterday in respect of the €2 billion savings that will result from changes in expenditure levels in various Departments. This exercise must be undertaken this month and that is one of the reasons the REV will only be available in early March. It is not intended to bring forward a Green Paper or a White Paper; it is intended to proceed, as a matter of priority, to introduce legislation to implement the decisions taken yesterday in order to secure and stabilise the public finances.

The pension levy will be applied in respect of gross income and not taxable income, which, as people know, is the gross amount of pay minus the pension contribution. In effect, therefore, those paying the new public service pension contribution will benefit from relief at the marginal rate of tax on the same basis and in the same way as those in the private sector who make pension contributions. Public servants making existing pension contributions, such as those in the Civil Service who pay into the spouses and orphans pension, have already benefited from tax relief in this way. That is the position.

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