Thursday, 17 December 2015
Department of Public Expenditure and Reform
Public Sector Pay
181. To ask the Minister for Public Expenditure and Reform the pay reductions and levies imposed on the public sector between 2008 and 2014; the changes that have taken place since 2014; the cost of reversing the cuts; and if he will make a statement on the matter. [45715/15]
From 2009 to 2014, through a mix of direct reductions in pay, the moratorium on recruitment and productivity measures, the cost to the Exchequer of public service pay was reduced by €3.7 billion, or more than 21%. Pay reduction measures under the Financial Emergency Measures in the Public Interest (FEMPI) Acts included the imposition of the Pension Related Deduction introduced in March 2009 and a direct reduction in remuneration in January 2010 for all public servants. An additional pay reduction for public servants in receipt of annual remuneration in excess of €65,000 in July 2013 was also implemented under the FEMPI legislation. These measures together with the Public Service Pension Reduction implemented in January 2011 are estimated to give rise to in excess of €2.2bn in direct reductions in public service remuneration and pensions.
It is not possible within the fiscal space currently available to Government and the requirement to manage public expenditure in accordance with the EU's Stability and Growth Pact to fund the some €2.2bn cost of reversing the FEMPI measures on public servants. To do so would be to reverse the hard won progress made in rescuing the economy from the financial collapse which it so recently faced.
The Government has now, through the negotiation and agreement of a financially prudent public service agreement on pay and related issues, provided for a gradual unwinding of the FEMPI measures as they apply to public servants. The terms of this agreement, the Lansdowne Road Agreement are being implemented under the Financial Emergency Measures in the Public Interest Act 2015 with effect from 1 January 2016 at a full year cost of €844m in 2018. Provision has also been made for an amelioration of the PSPR for public service pensioners at an additional full year cost of €90m in 2018. This approach has also enabled additional resources to be assigned for the ongoing recruitment of additional front line public service staff such as Gardaí, Teachers and Health professionals to support the delivery of our vital public services.