Dara Calleary (Mayo, Fianna Fail)
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45. To ask the Minister for Public Expenditure and Reform the timeline for reversing the public service pension reductions introduced during the economic crisis; the cost of restoring cuts on pensions up to €50,000 and full restoration; and if he will make a statement on the matter. [19746/16]

Paschal Donohoe (Dublin Central, Fine Gael)
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In June 2015, Government approved proposals for a significant amelioration of pension reductions which had been applied under the financial emergency (FEMPI) legislation to all public service pensions above specified thresholds. This amelioration of the Public Service Pension Reduction (PSPR), which subsequently became law under the Financial Emergency Measures in the Public Interest Act 2015, provides for changes to occur in three phases, on 1 January 2016, 1 January 2017 and 1 January 2018.

On 1 January 2016, increases in the exemption thresholds for PSPR application were activated. These exemption threshold increases fully removed PSPR from a significant number of pensions with relatively lower values, while those pensions which continue to be impacted by PSPR received a boost of €400 per year.

On 1 January 2017, additional PSPR amelioration, acting principally via further exemption threshold increases, will fully remove PSPR from another significant tranche of public service pensioners, while at the same time boosting those pensions which remain affected by PSPR by €500 per year.

On 1 January 2018, the third phase of PSPR amelioration will ensure that all PSPR-impacted pensions with values up to €34,132 will be fully restored, meaning that PSPR will no longer affect such pensions, while those pensions which continue to be impacted by PSPR will get a boost of, in most cases, €780 per year.

These phased PSPR changes across the public service will cost an estimated €90 million on an annual basis and, when fully implemented, will ensure that only the top 20% higher value public service pensions will continue to be impacted by the PSPR.

The cost of amending PSPR as currently applied by increasing the threshold before PSPR is applied to €50,000 is estimated to incur a further cost of €90 million per year. The PSPR yield in this scenario would be reduced to less than €15 million per year.

The costs of fully restoring the PSPR cuts as currently applied is estimated to be in the region of €105 million per year.