John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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194. To ask the Minister for Public Expenditure and Reform his proposals to remove the pension levy on public sector pensions; and if he will make a statement on the matter. [44379/14]

Brendan Howlin (Wexford, Labour)
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The public service Pension-related Deduction (PRD), referred to as "the pension levy" in the Deputy's question, was introduced in March 2009 under the Financial Emergency Measures in the Public Interest Act 2009.  PRD is a progressively structured multi-band reduction imposed on the pay of pensionable public servants. Based on the current PRD rates structure across all sectors of the public service, it is estimated that the deduction has raised €5.5 billion since it was introduced in 2009 and it continues to be a critical component of the public service pay and pension measures adopted as part of our national fiscal consolidation. Nevertheless, a start has been made in relation to the amelioration of the impact of PRD on public servants. As legislated for in the Financial Emergency Measures in the Public Interest Act 2013, and as provided for in the Haddington Road Agreement, the rate of PRD on the €15,000 to €20,000 band of pay received in a year fell from 5% to 2.5% on 1 January 2014. This rate cut is worth €125 annually in gross terms to most public servants, with those taxed at the standard rate enjoying the greater gain in terms of take-home pay boost.

The powers granted by the Oireachtas under the Financial Emergency Measures legislation are temporary in nature and predicated on the presence of a financial emergency in the State. The PRD is reviewable as part of my overall annual review of the wider set of emergency measures introduced under the Financial Emergency Measures in the Public Interest Acts 2009-2013.  In the last review conducted in June 2014, I concluded that it was necessary to continue to apply PRD.  My next annual report on PRD and the other emergency measures will be laid before the Houses of the Oireachtas by end-June 2015.