Bríd Smith (Dublin South Central, People Before Profit Alliance)
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12. To ask the Minister for Public Expenditure and Reform if, as well as committing to retain the link between the public sector pay and pensions, he will reverse the public sector pension reductions and levies inflicted during the recession; and if he will make a statement on the matter. [10502/17]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I expect I will receive some of the same predictive text from the Minister that Deputy Wallace was subjected to in terms of what I am about to say or what I would or would not say. My question relates to the injustice done to public sector pensioners when their payments were slashed in the years of austerity. Will the Minister confirm there is no threat to break the link between public sector pay and pensions? Will he further indicate how he proposes to adhere to the timescale for reversing the cuts to public sector pensions?

Paschal Donohoe (Dublin Central, Fine Gael)
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I was not aware I had texted the Deputy.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I was not talking about texting but to the verbal text coming out of my mouth. I expect the Minister will say something predictable about what I said, as he did in regard to Deputy Wallace's contribution.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
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Both the Minister and the Deputy are wasting time.

Paschal Donohoe (Dublin Central, Fine Gael)
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Hardly, Acting Chairman. We are having an exchange across the House. I am sure there will be as much predictability in what I am about to say as there was in what the Deputy just said.

The public service pension reduction, PSPR, which was introduced on 1 January 2011, is the only measure that has decreased the value of public service pensions in payment since 2008. PSPR applies as a progressively structured imposition on public service pensions under terms set out in the Financial Emergency Measures in the Public Interest, FEMPI, Act 2010, as amended.  As such, it has been and remains an important element of the pay and pension measures under the financial emergency legislation which have been critical to the stabilisation of the public finances.

The PSPR burden on pensioners, which was increased for higher-income pensioners from July 2013 under the Financial Emergency Measures in the Public Interest Act 2013, is now being significantly alleviated under the 2015 Act. This substantial part-reversal of PSPR is proceeding in three stages over the period 2016 to 2018. When complete on 1 January 2018, it will mean most public service pensioners are no longer affected by PSPR. All public service pensions with pre-PSPR values of up to €34,132 will be fully exempt from PSPR from then on, while those pensioners not fully removed from the reach of PSPR will, in the majority of cases, benefit by €1,680 per year. The cost of this very substantial PSPR amelioration under the Financial Emergency Measures in the Public Interest Act 2015 is estimated at some €90 million on a full-year basis from 2018. 

In the past, the occupational pensions received by public service pensioners were generally adjusted in line with changes in the wages or salary of the pensioner's grade at retirement.  Sometimes referred to as "pay parity", this non-statutory linkage lapsed in 2010 when pensions were left unchanged notwithstanding salary cuts at the beginning of that year affecting all public servants. This pension protection, albeit tempered from 2011 in some cases by the imposition of the PSPR, has worked to the benefit of pensioners, as indeed have the "grace periods" in respect of new-award pensions which accompanied the public service salary cuts in 2010 and 2013.

In light of these developments, the issue of how to adjust the post-award value of public service pensions through appropriate pay or other linkages will be considered by Government in due course.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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May I take it from the Minister's reply, without putting words in his mouth, that public sector pensioners should be assured there will be no attempt to destroy the link between public sector pay and pensions and that restoration of pension remuneration will be completed in full by January 2018? The Taoiseach and leader of the Minister's party may well be one of those pensioners in the near future, but he will be one of the lucky ones on more than €100,000 per year. However, some 100,000 public sector pensioners are in receipt of less than €25,000 annually. We must emphasis that reality in order to counter the notion that is abroad that these people are massively privileged. In fact, they have paid into and earned their pensions by right and those pensions are not exactly gold-plated. Will the Minister confirm he is on track to reverse the cuts that were imposed?

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy has attributed much to me that I did not say. What I did say is that future policy in regard to the linkages between public service pensions and pay will be dealt with by the Government in the context of negotiations we will have later this year. It is in recognition of the circumstances faced by the majority of pensioners that we implemented a faster reduction of the levy on pensions than we did in respect of the levy on salaries and wages. That was done in acknowledgment that pensioners do not have the opportunity to make up lost moneys by way of other incomes. I agree with the Deputy that while higher levels of public pensions do attract a degree of public focus and scrutiny, the reality is that large numbers of people who worked in the public service for many decades are in receipt of a pension many layers lower than that.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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To clarify, is the Minister still leaving open the possibility of breaking the link between public sector pay and pensions? Is he engaging here in another kite-flying exercise or is he attempting to leave the door open to the possibility of breaking the link as some type of bargaining chip in pay negotiations with the unions in the next phase of the Lansdowne Road agreement talks?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am engaged in neither kite-flying nor seeking to have a bargaining chip in advance of future negotiations. I have outlined the process for dealing with this issue. In recent years, the link between pensions and pay was broken.

That was done to ensure that pensioners could be treated differently in recognition of their no longer working. The levy on pensions is on track to being reduced at a faster rate than the levy on wages. All other matters relating to future pension and pay policy will be dealt with in the way that I have described.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
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Is Deputy Broughan happy that Question No. 13 was discussed with Question No. 10?

Tommy Broughan (Dublin Bay North, Independent)
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I will ask a tiny addendum. What is the projected cost and is planning permission for the works needed?

Seán Canney (Galway East, Independent)
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I am advised that the cost will be in excess of €1 million. The exact figure will not be determined until all of the investigative works have been conducted. I am unsure about the issue of planning permission, but I will revert to the Deputy with the answer.

Tommy Broughan (Dublin Bay North, Independent)
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In case I do not get another chance, I will raise a related matter with the Minister. When the obituaries of this Parliament and Government were being written a couple of weeks ago, many journalists mentioned that the budget oversight office had not been established yet. This matter has been raised at recent meetings of the budget committee. The Minister told me that funding was in place to invigilate the Ceramics Room and so on. Will he ensure that the office will be established by this Dáil as soon as possible?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am unsure as to whether that is a question on ceramics or the public budgeting office. Is the Deputy asking me whether-----

Tommy Broughan (Dublin Bay North, Independent)
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The budget office.

Paschal Donohoe (Dublin Central, Fine Gael)
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-----we aim to set up that office?

Tommy Broughan (Dublin Bay North, Independent)
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The Minister stated that he had funding in place for the committee to establish the office, which would be like the Comptroller and Auditor General's office, but in reverse. Does he have that funding?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Tommy Broughan (Dublin Bay North, Independent)
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When will it be established?

Paschal Donohoe (Dublin Central, Fine Gael)
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I answered questions on this earlier, but the Deputy was not present.

Tommy Broughan (Dublin Bay North, Independent)
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Okay.

Paschal Donohoe (Dublin Central, Fine Gael)
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We have reached agreement on the level of staffing and the office's head's post will be advertised soon. The body will be set up by the Oireachtas with my support.