Brian Lenihan Jnr (Dublin West, Fianna Fail)

The 10% reduction in the pay of new entrants to the public service contained in the national recovery plan will be applied to the salary rate of those appointed to hold office in the Judiciary in 2011. The €250,000 maximum will be applied to all such offices.

A reduced maximum rate of pay of €250,000 will apply to the next President of Ireland. I want to record the significant contribution made by the current President who, since this downturn began, has waived a significant portion of her remuneration.

I intend to make provision for these reductions in legislation.

In addition to reduced pay rates, all new recruits to the entry grades of the public service must start at the first point of the relevant pay scale without exception. Although recruitment will necessarily be limited over the next number of years, this measure will ensure a medium-term reduction in the overall cost of public service pay.

The cost of providing public service pensions has increased significantly in recent years. Pensioner numbers have grown from 76,000 in 2006 to about 103,500 this year. That is an increase of 36%. Expenditure has risen by 56% from €1,433 million to €2,235 million in the same period.

Public service pensioners have so far been unaffected by the reductions imposed on serving staff. The Government considers it appropriate that those pensioners who can afford to should now share the burden of adjustment. Accordingly, public service pensions above €12,000 a year will be reduced by an average of 4%. Those on a pension below €12,000 a year, roughly equivalent to the value of the social welfare pension, will be exempted. The reduction will be applied fairly. Those on higher pensions will pay most. It will apply to former political officeholders, retired members of the Judiciary, and their survivors or dependants.

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