John Perry (Sligo-North Leitrim, Fine Gael)

I thank the Deputy for raising this important issue and extend to her the apologies of the Minister, Deputy Howlin, who is on Government business.

In the context of the extreme economic and fiscal conditions of the State, the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 provides for the reduction in the pay rates of all persons employed by bodies deemed to be public service bodies for the purposes of the legislation with effect from 1 January 2010. Such reductions apply irrespective of whether a particular post is funded in whole or in part through non-Exchequer funds or income.

The non-teaching staff referred to, such as catering, maintenance and administration staff, are deemed to be public servants within the meaning of and for the purposes of the Act, whether employed in recognised public or private schools. This position has been confirmed by legal advice. The former Minister for Finance approved a temporary exemption under section 6 of the Act for certain categories of workers in the education sector, including caretakers and secretaries, until 31 December 2010. Accordingly, the Act has been applied to those specific categories of workers in the education sector since 1 January only, in contrast to all other public servants.

It is important to understand that while there are a variety of staff across the education sector who are employed by public service bodies as defined under the Act but are either wholly or partly funded from non-Exchequer sources, there are also staff undertaking the same or similar duties whose posts are fully Exchequer funded. All of these staff have now been subject to the terms of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009.

It is also important to note that approximately €22 million in savings will be secured in 2011 through an average 5% reduction in funding grants to schools and vocational educational committees. The reduced funding will reflect the reduction in pay since 1 January. There is, therefore, a real saving to the State from this measure and all savings are important in maintaining public services.

Section 7 of the Financial Emergency Measures in the Public Interest (No. 2) Act provides that the Minister shall, before 30 June 2011 and every year thereafter, carry out a review of the operation, effectiveness and impact of the Act, having regard to the overall economic conditions in the State and national competitiveness; consider whether the provisions of the Act continue to be necessary having regard to the purposes of the Act, the revenues of the State and Exchequer commitments in respect of public service pay and pensions; make such findings as he or she thinks appropriate consequent on the review and consideration; and cause a written report on his or her findings resulting from the review and consideration to be prepared and laid before each House of the Oireachtas. However, that review will not involve the consideration of the position of individual public servants.

Full consideration of the position of the group in question was given by the previous Minister for Finance and there are no plans to reconsider the application of the Financial Emergency Measures in the Public Interest (No. 2) Act to the categories of staff referred to. As mentioned, the application of the legislation to such staff has been confirmed by legal advice, given that the staff are employed by public service bodies within the meaning of the legislation.

The Deputy also asked about the application of the proposed pension fund levy to the individuals in question. I am unaware of the circumstances of the individuals concerned, but the pension fund levy will apply to the market value of assets in funded pension schemes at a rate of 0.6%. It will be a matter for the trustees or administrators of individual pension schemes to determine whether or to what extent individual pensions will be affected. The purpose of the pension fund levy is to fund the measures announced in the jobs initiative, including the reduction in the lower rate of VAT on certain services from 13.5% to 9% and the reduction in employer PRSI, both of which will benefit lower paid workers.

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