Gerard Craughwell (Independent) | Oireachtas source

I welcome the Minister of State to the House. This is my first time to address him since his elevation. I congratulate him. It is great to see him here.

We are here to talk about pension abatement. Contrary to popular opinion, people employed in the public service pay for their pensions and they have a legitimate expectation and right to receive the associated benefits when they retire.

The Public Service Pensions (Single Scheme and Other Provisions) Act 2012 was introduced for new entrants to the public service from 2013. The Act implemented a number of reforms of public service pensions, including the extension in section 52 of the basis of pension abatement or reduction for rehire of pensioners in the public service from the date when the Bill was commenced.

The object of pension abatement was to ensure that the rate of pension, when added to the rate of pay or fee for work in the public service carried out by a retiree from the public service, would not exceed the salary earned pre-retirement by that person. Given that many senior public servants opted to avail of the various deals under the Croke Park, Haddington Road and Lansdowne Road agreements it was understandable that some methodology would be put in place to ensure a person with a large pension could not benefit in retirement by being rehired or by re-entering the public service. In particular, there was a concern at the time that Secretaries General, assistant secretaries general, principal teachers and various other senior people who went out with lucrative pensions and lump sums would not be rehired immediately and benefit from both a pension and a new salary.

However, the latent effect of the 2012 Act has been to penalise a small number of pensioners while many others enjoy their pensions and their new jobs in public service. In truth, the pension abatement scheme is riddled with unfairness and inequality. For example, workers in the health service who are re-employed by the HSE are not subjected to any abatement simply because they are agency workers. The former Minister for Public Expenditure and Reform, Deputy Howlin, explained how this could happen in July 2013. He said that where a private agency employs an individual, the HSE contract is with the agency and not the individual.

To highlight the unfairness, I will set out an example involving two public servants who have retired from a security related post at the age of 58 years. Both still have considerable working life left in them - I imagine the Minister of State will agree with that much. Let us suppose their pre-retirement salary was €45,000 per year. They both now have a pension of €22,500. Then let us suppose both are offered positions in different public hospitals and the salary for the new job is €45,000. Person A, who went to the job by way of an agency, gets a €45,000 salary and his pension of €22,500 as a result of being an agency employee. Person B is hired directly by the hospital. However, because the salary is now €45,000 his pension is totally abated because he cannot earn more or benefit as a result of pension abatement. This is totally unfair. Only a small number of people are affected by this because most staff rehired to the public service come through agencies.

We have frequently heard from Governments in the past that the pensions of former taoisigh and Ministers are subject to property rights and cannot be touched. The argument is that the relevant people have earned them and paid for them and that they belong to them. Yet this does not apply when we are discussing people in the public service who retire on relatively meagre pensions and seek to re-enter the public service or are offered jobs because they have particular expertise.

The financial emergency measures in the public interest legislation was brought in to cut all pensions. The pensions we are talking about have already been cut by the State. The people concerned are entitled to retain their pension in full. This must be dealt with in the forthcoming budget. It is grossly unfair that a small number of people suffer total abatement of their pensions while others, in particular, those in some of the more lucrative jobs, can earns vast sums of money as well as their pensions. I thank the Minister of State for coming to the House. Thank you for your forbearance, a Chathaoirligh.