Written answers

Thursday, 24 November 2016

Department of Public Expenditure and Reform

Public Sector Pay

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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13. To ask the Minister for Public Expenditure and Reform the cost of returning to a single tier pay structure within the public sector. [36572/16]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The 10% reductions in starting pay for certain new entrants were introduced in January 2011 as part of the National Recovery Plan in order to reduce the Public Service Pay Bill by the then Government.

The issue of addressing the difference in incremental salary scales between those public servants, who entered public service employment since 2011 and those who entered before that date was addressed with the relevant union interests under the provisions of the Haddington Road Agreement (HRA). From 1 November 2013 pre and post-2011 pay scales were merged into a single consolidated scale applicable to each grade. Generally, the third point of 1 November 2013 payscale is equivalent to the first point of scale of the pre 2011 scale.  Guidelines in relation to the merging of the scales are available on my Departments website 

Any further remuneration adjustment, for any group of public servants including new entrants, can be examined under the framework of the Lansdowne Road Agreement but must also be considered in the context of the total cost of the agreement (€844m) and the total cost of the outstanding FEMPI restoration post Lansdowne Road (€1.4bn).

Acting within these constraints, the Agreement has provided the flexability to address particular sectoral issues such as the restoration of supervision and substitution payments and new entrant payments in the Education Sector and the restoration of rent allowances to new entrant firefighters and members of An Garda Síochána.

Photo of Clare DalyClare Daly (Dublin Fingal, Independent)
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14. To ask the Minister for Public Expenditure and Reform the reason pay restoration has to date focused on high earners rather than lower earners; and his plans to redress this matter through new pay restoration negotiations. [36364/16]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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In relation to the unwinding of Financial Emergency Measures in the Public Interest (FEMPI) measures for low earners, the Deputy will be aware that the application of the FEMPI pay reductions were extremely progressive, with pay reductions ranging from 5% at lower pay levels to 29% at higher pay levels. 

Again the measures applied under the phased unwinding of the FEMPI reductions through the LRA were also progressive - it provided the greatest benefit at the fastest pace to lower paid public servants by:

- exclusively targeting those earning under €65,000 for increases in pay - ranging from €1,500 for those earning €20,000 to €1,000 for those earning €60,000.

- utilising increases in the exemption threshold of the Pension Related Deduction (PRD) to maximise the benefit to low paid workers. All statutory deductions other than tax are made before PRD is taken from salary, therefore, a reduction of an amount in PRD will benefit the employee to that amount, less PAYE.  For a person on the lower 20% tax rate, a €100 reduction in PRD gives a benefit of €80.

Consequently the percentage benefit of the commitments in the Lansdowne Road Agreement is clearly weighted to lower paid public servants - those on €20,000 will benefit by 8.1% of gross salary. 

As a result public servants earning under €24,000 will be fully restored under the LRA, while those earning under €30,000 will have approx 80% of their FEMPI reductions unwound.  In contrast,  public servants who are earning €70,000 will receive 32% of their FEMPI reduction or those earning €120,000 who will receive 28% of the FEMPI reduction that was applied to their remuneration.  

Any further FEMPI adjustment measures post the Lansdowne Road Agreement will be collectively negotiated with the relevant union interests at the appropriate time and will have to be sustainable and affordable.

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