Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 59: To ask the Minister for Public Expenditure and Reform if he will consider capping annual civil and public sector pension payments at €35,000; and if he will make a statement on the matter. [28634/11]

Brendan Howlin (Wexford, Labour)
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My Department estimates that the average public service pension is around €20,000 and would not be affected by the cap proposed by the Deputy. Indeed, fewer than 1 in 100 public service pensioners has a public service pension in excess of €60,000.

As the Deputy may know, public service pensions have been reduced already, under provisions introduced by the Financial Emergency Measures in the Public Interest Act 2010. The public service pension reduction (PSPR), effective from 1 January 2011, is as shown in the Table below.

TABLE

Annualised Public Service Pension amount (€) Reduction

First 12,000 Exempt

Between 12,000 and 24,000 6%

Between 24,000 and 60,000 9%

Balance above 60,000 12%

I am advised that a cap on civil service pensions above €35,000 would save (ignoring the PSPR) in excess of €43 million in the civil service alone. However, as a public service pensioner in receipt of a pension in excess of €35,000 would be paying tax and the universal social charge, the Exchequer would receive only a proportion of these savings in net terms.

There are complex legal and constitutional issues surrounding any further change to vested property rights which would arise if the Government was to pursue a policy along the lines indicated by the Deputy. Such an interference, in the case of a potentially vulnerable class of citizens without other alternative income sources, such as pensioners, would need to be both proportionate and clearly in the public interest. The Financial Emergency Measures in the Public Interest Acts 2009 and 2010 cited, in recitals to the legislation, the particular circumstances which, in the public interest, necessitated the reductions brought in by those statutes.