Kevin Humphreys (Dublin South East, Labour) | Oireachtas source

I thank Senator Craughwell for raising this issue of which I am very much aware, having served on Dublin City Council for many years. I have also had extensive engagement on this issue with Senator Denis Landy and Dublin City Councillors Mary Freehill and Dermot Lacey, who is in the Gallery. It is not a popular subject to raise and I compliment the Senator on raising it. He certainly will not get any brownie points with the public for raising this important issue.

Many councillors who work full-time for their constituents will be severely disadvantaged when they reach retirement age because they have not picked up enough contributions for their pension fund. I accept the gratuity in itself does not compensate for the hours of dedication and work they have given. Not many people in the public would understand the long hours put in by councillors, especially if one represents a disadvantaged area. One very much becomes a full-time advocate for the people one represents, often in difficult circumstances. I am glad the Senator pointed out that what is not often understood by the general public is that some councillors are financially disadvantaged by representing people in their area because they come from higher paid jobs in the private sector.Even councillors who work full-time give up career opportunities such as promotions. What person working in the private sector would give somebody a promotion knowing that person works long hours representing the people? Other councillors feel duty-bound when elected and by no means see it as an advancement. They are dedicated and want to work in local government. It would be very difficult to live on a full-time salary of €16,000 plus. I have had several meetings with different groups in this regard and I wish I could report progress but I have not made much. The Senator knows me long enough to know that I say it as I see it.

Some of the following issues have been touched on by the Senator. City and county councillors are regarded as public officeholders for the purpose of charging PRSI. They are not employees and are not subject to the contribution applying to employees. PRSI charges on officeholders were introduced in budget 2011 and apply to public officers such as the President, Members of the both Houses, the Judiciary, the Attorney General, the Comptroller and Auditor General and city and county councillors. There is a very big difference between the salaries paid to the first group I mentioned and city and county councillors. From 1 January 2011, public officeholders pay PRSI on their incomes at the class K rate of 4%, providing their income exceeds €5,200. This is €100 per week, which is not an awful lot. All public officeholders are liable to pay the contribution, regardless of age. People with incomes of less than €100 per week do not pay PRSI and return their income under the PRSI class M stamp. PRSI payments by officeholders do not contribute towards establishing social insurance entitlements prior to 2011. All officeholders were exempt from PRSI on income received in their capacity as officeholders, which the Senator outlined in his contribution. The income and consequential pension and retirement gratuities paid to officeholders are funded by the Exchequer. The PRSI charges on officeholders' income were introduced as a measure of solidarity. It was seen that public representatives from the very high to the very low would take an income hit and this is what happened.

City and county councillors may establish an entitlement to social security benefits based on non-council related activities. Many councillors have their own businesses or are able to stay in employment and they keep their entitlement. However, as the Senator outlined, a number of councillors work full-time and are, therefore, not entitled to these benefits after many years of service. The public does not appreciate the sacrifices many county and city councillors make. It is certainly not for financial advancement. During my time on local authorities, I did not meet many wealthy councillors. They do it because of their dedication to the community. They often enter politics and local authorities through community activities and want to make their communities better.

There is a voluntary contribution system that helps in respect of pension entitlements and there are quite restrictive limitations. I participated in that system, which is probably one of the best investments I ever made. When I became an elected councillor, I read Barry Desmond's biography in which he said that from the time he entered full-time politics, he paid his voluntary contributions which then gave him his entitlement. This was only to the old age contributory pension and not to any unemployment benefit. Many councillors from all parties and none have faced extreme financial difficulties.Given that their salaries were not high, they had not accumulated savings and found themselves in very severe financial difficulties. Senator Landy has been engaging, not in a party sense but on behalf of everybody, and he is determined to continue to try to come forward with a resolution. If the Senator wishes to participate in this, I am happy to work with him and see if we can find a solution. Unfortunately, in many such cases, when one amends the Social Welfare Acts, there are unintended consequences. Therefore it must be considered very carefully.

I wish I were coming here with good news. I am not, and I do not want to spread false hope. I am happy to work with Senators and councillors to see if we can find some kind of solution that does not have unintended consequences. It must be limited and must target the councillors who are most disadvantaged. Councillors who can remain in full-time work, have their own businesses or who work in the legal or education sectors are different. This is a small group that is particularly damaged. They contribute but receive nothing. I take the Senator's points and thank him for raising them. While I cannot give a promise, I will work with interested parties to see if we can reach a fair resolution.