John Deasy (Waterford, Fine Gael)
Link to this: Individually | In context

Question 69: To ask the Minister for Finance the way he plans to operate the early retirement and employment embargo; and the savings in the public service pay bill which he estimates from each measure. [19040/09]

Ruairi Quinn (Dublin South East, Labour)
Link to this: Individually | In context

Question 112: To ask the Minister for Finance the expected Exchequer saving for 2009 and 2010, respectively, resulting from the incentivised career break and incentivised early retirement schemes for public servants; and if he will make a statement on the matter. [18965/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 69 and 112 together.

The Government has recently announced a range of initiatives which are intended to lead to savings in the public service pay bill.

The first of these initiatives is the Government decision that, with effect from 27 March 2009, no public service post, however arising, may be filled by recruitment, promotion or payment of an allowance for the performance of duties at a higher grade, and any limited exceptions to this principle would require my prior sanction. This decision also applies to temporary appointments on a fixed-term basis and to the renewal of such contracts. Vacancies may be filled by redeployment of staff from other Departments or public bodies with my sanction. There is some limited flexibility in how this decision is to be implemented in the Health and Education Sectors to reflect the particular service needs in these areas.

In the April 2009 Supplementary Budget, I announced three further initiatives that will contribute to payroll savings. The Government has decided to offer an Incentivised Scheme of Early Retirement in the public service to reduce the public service pay bill and facilitate a permanent, structural reduction in the numbers of staff serving in the civil service, local authorities, the health sector, non-commercial state bodies and certain other areas of the public service. On 30 April 2009, my Department issued a circular regarding the operation of this Scheme in the civil service. The civil service circular will be used as a model for the operation of the scheme in other appropriate areas of the public service, although there may have to be modifications to accommodate the particular needs of those areas.

In essence, the Scheme is open to applications from 1 May 2009 until 1 September 2009. Employees 50 years of age or over by 1 September 2009 who have already accrued entitlement to preserved superannuation benefits under a public service scheme, and who have not yet reached normal preserved pension age, are eligible to apply for early retirement under the Scheme. In general, Departments are expected to facilitate the early release of staff, with priority being given to the officers with the longest service, other things being equal. In general, the Scheme will be subject to local management arrangements and controls to ensure that its operation does not undermine the effective delivery of services to the public. The Scheme provides that applications can be deferred for up to one year, or in exceptional cases refused, for stated business reasons.

The Government has also decided to implement two new work-life balance initiatives, the Special Civil Service Incentive Career Break Scheme to facilitate civil servants in taking a career break for 3 years, and the Shorter Working Year Scheme which replaces the existing Term Time Scheme. Circulars have also issued from my Department in regard to the operation of these schemes in the Civil Service; these measures or their equivalent will also be extended to other appropriate areas of the public service in due course.

While the Exchequer savings arising in respect of each of the above schemes cannot be projected with certainty, as they are dependent on take-up in each case and other factors, taken together it is estimated that the above package of measures could yield payroll savings of the order of €150 million in 2009 and €300 million in a full year. It all depends on take up.