Joe McHugh (Donegal North East, Fine Gael)
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Question 115: To ask the Minister for Finance his position on the taxation of public sector retirement gratuities; his views on whether the imminent taxation of gratuities is driving experienced public sector workers into early retirement; his further views on whether these early retirements are removing vital local knowledge from our public services and resulting in a diminishing return; and if he will make a statement on the matter. [32367/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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On the issue of the tax treatment of retirement gratuities for public servants, the position is that under statutory pension schemes and pension schemes approved by the Revenue Commissioners there is no liability to income tax in respect of retirement gratuities or lump sums paid to members of such schemes on retirement. In this regard, it should be noted that the tax arrangements for retirement lump sums apply in respect of pension schemes in both the public and private sectors.

The Commission on Taxation has recommended changes to the tax treatment of retirement gratuities and this recommendation, together with the many other recommendations in the Commission's Report, will be considered by me and my Government colleagues in due course.

As regards the impact of early retirements on public services the position is that there is a constant turnover of experienced staff in all public service organisations and it is a matter for local management to ensure that systems and procedures, including succession planning, are in place to ensure that service delivery standards are protected as much as possible.