Brendan Howlin (Wexford, Labour) | Oireachtas source

The public service pension related deduction, PRD, referred to as the pension levy in the Deputy's question, was introduced in March 2009 under the Financial Emergency Measures in the Public Interest Act 2009. the PRD is a progressively structured multi-band reduction imposed on the pay of pensionable public servants. Based on the current PRD rates structure across all sectors of the public service, it is estimated the deduction raises €950 million per year. Unfortunately, it continues to be necessary because it is a critical part of our national fiscal consolidation.

Notwithstanding encouraging evidence of progress in respect of the public finances, immediate reversal of the PRD would require revenue to be raised from other expenditure reductions in other areas and there is no obvious area where I could find an extra €1 billion in cuts. Nevertheless, a start has been made in respect of the amelioration of the impact of PRD on public servants. As legislated for in the Financial Emergency Measures in the Public Interest, FEMPI, Act 2013 and as provided for in the Haddington Road Agreement, the rate of PRD on the €15,000 to €20,000 band of pay received in a year fell from 5% to 2.5% on 1 January 2014. This rate cut is worth €125 annually in gross terms to most public servants. The first part of income up to €15,000 is exempt from the PRD.

The powers granted by the Oireachtas under the FEMPI legislation are temporary, as I have already indicated. The PRD is reviewable as part of the overall review I mentioned and I present that review annually to the Oireachtas. My next annual report on PRD and the other emergency measures will be laid before the Houses of the Oireachtas by the end of June 2015.

As I have already stated, the Government also has to have a plan to address the legislative position as the extreme fiscal situation comes to an end. As part of the general discussions next year, the pension levy will be on the agenda.

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