Joan Burton (Dublin West, Labour)
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Question 138: To ask the Minister for Finance if, with respect to the proposed new pension levy on public sector incomes, the levy is to be taken from employees irrespective of their entitlement to a pension; if the levy is applicable to overtime payments which are not pensionable; if the levy is applicable to travel allowance; if the levy is applicable to people on the integrated pension scheme, that is, employees who have started their employment post-1995 in the public sector; if, in cases in which employees work less than two years in a public sector job and leave, these employees are entitled to get their contributions to the levy returned; and if he will make a statement on the matter. [6509/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is proposed that the new pension related deduction will apply to all remuneration including allowances. Sums paid in respect of travel and subsistence allowances will not be subject to the deduction. The deduction will be made from gross pay before income tax, PRSI and health levies are calculated. Thus, pension contributions will be effectively relieved of tax at the marginal rate.

It is intended that the pension deduction will apply to employees in bodies where a public service pension scheme exists or may be made. This includes those who started work in the public service post 1995 and whose pensions are calculated using an integration formula effective from 1 January 2004. This system delivers increased pensions to members of public service pension schemes whose full-time salary is less than 3 1/3 times the Contributory State Pension.

With regard to public service employees working in a body where there is or may be a pension scheme, if the employees are not entitled to be members of that scheme, for whatever reason, then it is intended that those employees will not be subject to the deduction. Deductions will be repaid to those who leave the public service with no preserved pension benefit, i.e. with fewer than two years service.