Dáil debates

Tuesday, 16 December 2014

2:55 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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92. To ask the Minister for Public Expenditure and Reform if he acknowledges the continuing public concern over ministerial pensions; his plans for further measures in this area; and if he will make a statement on the matter. [47834/14]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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A question that arises time and again for me and, I suspect, quite a few Members of this House - in the context of the recent protests and, in a general sense, based on people's experience of austerity and their financial difficulties - concerns the running sore of ministerial pensions. People keep talking about this and are outraged and furious that some of the key Ministers and taoisigh involved in bankrupting this country have walked away with enormous severance payments and salaries. I would like the Minister to give some detail on this. While I know there have been some changes, I contend that even sitting Ministers and taoisigh will be entitled, after just two years of serving in this Government, to a pension. The Taoiseach will get €20,000, while a Minister or the Tánaiste will get €18,000 just after two years. The average civil servant, however, would have to work 40 years to get an equivalent amount. Ministers, on top of being entitled to pensions, get a Deputy's salary and so on. How does the Minister respond to the anger and outrage over that sort of injustice?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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One does not get a pension and a Deputy's salary at the same time. That was abolished.

The pensions of Oireachtas Members, including Ministers and other officeholders, have been subject to a range of measures in the past few years that have substantially reduced the benefits awarded by previous Governments to political officeholders and that have had significant downward effects on the pension entitlements of current officeholders.

The Public Service Pensions (Single Scheme and Other Provisions) Act 2012 introduced a new single public service pension scheme for all new entrants, including new Oireachtas Members, from 2013. The scheme applies a new minimum pension age of 66 years, raised from 65 years, to new entrant public servants and is linked to increases in the age for the contributory State pension. Benefits under the new scheme are substantially revised, with pensions for all new entrant public servants, including Ministers and Oireachtas Members, to be based on career average earnings rather than the current final salary basis.

Successive Financial Emergency Measures in the Public Interest Acts have had an impact on the pay and pensions of officeholders. For example, the pay reductions have reduced the salaries on which pensions are calculated substantially. A progressive public service pension reduction, PSPR, was introduced from January 2011 on the pensions of those who retired before March 2012. From January 2012, a new higher PSPR rate of 20% was introduced for pensions of more than €100,000. Further PSPRs were introduced subsequently for pensions of €32,500 and above from July 2013. These will have an impact on all those retiring before the end of the current grace period. These measures were deemed necessary and appropriate to ensure that higher-paid pensioners, including officeholders, made a fair and proportionate additional contribution to fiscal consolidation.

Other measures introduced in recent years which have had an impact on pensions include the exclusion for pension purposes of long service increments, the bar on serving Oireachtas or European Parliament Members from receiving ministerial pensions and the application of aggregation of public service pensions in the calculation of a pension where the aggregated value of such pensions are in excess of €32,500 per annum.

We have reduced pay for current officeholders, including the Taoiseach, whose pay has been reduced by 41%, which has a knock-on effect on his pensions. With regard to previous officeholders, to whom the Deputy referred, I have gone as far as the legal advice available to me allows. The Deputy was not present when I debated this matter previously with Deputy Healy. A constitutional issue of preserved property rights arises and I am conscious of the need to avoid introducing any measure that would cause a collapse of the entire financial emergency measures in the public interest legislation, as to do so would be ruinous for the State.

3:05 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I raise this issue because it angers many people. While I acknowledge that it is a complicated area and a number of changes have been made, it makes people's blood boil when they hear a report that 111 former Ministers were paid pensions worth €9,653,000 in 2012. Notwithstanding the Minister's response, I understand the Taoiseach can walk away with a pension of €20,000 after only two years in the role, and I presume the Taoiseach's pension increases in subsequent years. After two years, the pensions available to the Tánaiste and Ministers are approximately €18,000 and €15,000, respectively. The average public sector worker would have to work for 40 years to accumulate a pension of €20,000, whereas the Taoiseach receives that level of pension after only two years and, on reaching retirement age, he will also receive the pension provided to a Deputy and so forth. Having been hit with all the financial emergency measures, the universal social charge and pension levies, people ask the reason the Taoiseach and other Ministers can walk away from office after only two years with a pension of nearly 20 grand.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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All the levies the Deputy mentioned also fall on Members of the Oireachtas. We are not immune from any of these measures. Fast-accrual pensions apply to certain categories of person. Whereas a civil servant may be employed in the Civil Service for 40 years, a Taoiseach or garda will not be in his or her role for 40 years. Taoisigh and gardaí have fast-accrual pensions because it is understood they will not be in the same position for a long period. Fast-accrual pensions are occupation-specific.

The Government has taken dramatic measures to reduce salaries. The first action taken by the Taoiseach on taking office was to impose a cap of €200,000 on his salary. This cap obviously has an impact on his pension, and his salary has been further reduced since. These reductions have filtered down to all officeholders.

There is public annoyance that people who were charged with oversight walked away from politics and public administration after the debacle of the crisis.

People believe they did not take a proportionate hit for the crisis that had happened. That is a concern for them, but we can only go so far within the Constitution. We have introduced a pension abatement figure of 20% for those on the highest pensions, which is as far I was advised I could go legally.

3:10 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I have studied the answer in detail. On the issue of constitutionality, there are two categories. There is a category of people which includes former Taoisigh, Ministers and so on who are associated with the bankruptcy of the country and who have walked away with large amounts of money. It infuriates people that they can be penalised for what they see as the crimes of others, while those who were at the helm walk away, effectively, scot-free. They would like the Government to re-examine what can be done and whether measures can be taken. They are outraged by this when they cannot make ends meet and have been hit with emergency measures, the imposition of water charges and all the rest. I sat through a committee meeting with the Minister at which we discussed fast accruals, firemen and gardaí. However, when we discuss Ministers, we find that the level of fast accrual is a multiple of what a fireman or garda receives. I understand that for a Deputy there is a fast accrual level of 20 years, but for a Minister it is two years, which is extraordinary and not comparable with the level for a fireman, a garda or a soldier. How can this be justified? They will also receive fairly generous pension entitlements as Deputies, having been remunerated very well as Ministers and so on. After two years they walk away with €18,000 or €20,000. Others say, "We will never get that; we might not get it as our entire pension entitlement at the end of our lives."

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Obviously, people will not be Ministers for 20 years. I do not think it happened in the past, but it will not happen in the future. It is understood accrual would be swifter and that has been the way ever since pensions were introduced. As I indicated, we have worked to reduce the amounts considerably. I do not know whether it is the view of the Deputy that there should be no pensions for Ministers because if there was a 20 year horizon, there would be no benefit at all in being a Minister in terms of pension rights, if he wanted to equate it with a Deputy's 20 year pension. We have imposed a significant reduction on anything which has gone before. It is a reasonable set of measures which is proportionate in terms of what is required. There are other public servants, people in academia and the Judiciary who have significant pensions - in some instances, fast accrual pensions - which are linked with and tailored to meet the specifics of their occupations.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Deputy Micheál Martin is not present to take the next question.

Question No. 93 replied to with Written Answers.