Emmet Stagg (Kildare North, Labour)
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Question 144: To ask the Minister for Finance the reason correspondence from a person (details supplied) in County Kildare has not been dealt with. [18430/11]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the case which he raises has been the subject of lengthy correspondence with my officials. The retiree concerned was informed in replies of 29th December 2010 and 4th January 2011 from my Department that there were no grounds for his retirement to be cancelled and for him to be reinstated, and the basis for the introduction of the Public Service Pension Reduction (PSPR) was explained to him. The essential point in these replies was that the application of the reduction to the person's pension is in accordance with the provisions of Oireachtas legislation which was enacted to deal with the financial emergency prevailing. Replies have now issued to both the Deputy and the person in question. Correspondence since then has asked for an elaboration of previous replies which I am happy to give as follows. As you know, the PSPR is in place since 1 January 2011, and was legislated for in the Financial Emergency Measures in the Public Interest Act 2010. Section 2 of that Act provides that the public service pension of a pensioner (as defined) is reduced. Section 2(2) specifically provides, among other things, that the reduction "has effect notwithstanding … any circular or instrument or other document, any written agreement or contractual arrangement … ".

The PSPR applies to public service pensions generally, including those of retired Ministers, Judges and other senior public servants. Any reduction in pension payments is, of course, a serious step. However, the grave state of the public finances and the threat to Ireland's economic well-being provide the context for exceptional measures such as the PSPR. In this connection, you will be aware that Ireland is availing of financial assistance programmes provided by the IMF and the EU and has undertaken to meet fiscal targets in that regard.

It should also be noted that the first €12,000 of pension is exempt from the reduction, and that the bands and rates of the reduction are progressively structured so that persons on lower pensions are proportionately less affected than those on higher pensions.

Section 6 of the Act gives the Minister power to exempt a class or group of pensioners from the imposition of some or all of the reduction, if he is satisfied that they are materially distinguished by some particular aspect of their pension position from others who are subject to the reduction and the Minister considers it just and equitable to do so.

The person in question may wish to make a formal application for exemption under Section 6, and the matter will be given consideration. The delay in replying to the later letters is regretted and I have asked my Department to convey these regrets to the correspondent.