Irish News

Wednesday 1 October 2014

Fianna Fail plans 30% pension cut

Published 22/11/2012 | 15:04

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Michael McGrath says former politicians should take further cuts under the public sector pension reduction scheme

Fianna Fail has proposed slashing retired politicians' pensions over 100,000 euro by 30% under its alternative budget proposals.

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Finance spokesman Michael McGrath said former politicians, along with other retired public servants, should show solidarity with the public by taking further cuts under the public sector pension reduction scheme. But he accepted the Fianna Fail proposals could go further.

"I think they could be reduced further and that's the view of the party, but we have to bring forward proposals that are realistic and can withstand any challenge," said Mr McGrath.

His party proposed hiking existing cuts to public sector pensions from 20% to 30% for those taking home more than 100,000 euro, and from 12% to 25% for those between 75,000 and 100,000.

"The pensions are excessive, there's no question about that," said Mr McGrath. "Not just for retired government ministers and senior public servants, but for bankers and retired CEOs."

The Fianna Fail budget proposals also included a hike on the universal social charge (USC).

Workers earning more than 100,000 should see their USC increase by 3%, the party said, which would allow the Government to avoid touching income tax.

"We believe that the proposals we have are reasonable, they are fair, they are progressive," said Mr McGrath.

The party also proposed a fat tax, which would see the cost of a chocolate bar increase by three cent, and a bottle of coke rise by five cent. It also suggested further hikes to tobacco and alcohol, raising the excise duty on a bottle of wine by 75 cent, as well as motor tax increases.

The existing public sector pension reduction scheme imposes a 20% cut to pensions over 100,000 euro, and a 12% cut to those between 75,000 and 100,000 euro. But the cut only applies to the amount over the specified limit, meaning people with a 150,000 euro pension would see the cut imposed only on the 50,000.

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