Monday 29 December 2014

Top civil servants pay just €12 more in PRSI changes – McGrath

Published 23/12/2012 | 05:00

Senior public servants earning €75,000 or more a year will pay just €12 a year more as a result of the PRSI changes in the Budget, Fianna Fail spokesman Michael McGrath has claimed.

But workers earning a minimum wage of €18,500 a year will pay an extra €264 a year.

This is because of the existence of a PRSI exemption for permanent and pensionable civil and public servants, recruited prior to April 6, 1995, who pay PRSI at a rate of 0.9 per cent on weekly amounts earned up to € 1,443 and 4 per cent on the remainder.

"By its very nature the abolition of the PRSI allowance will have a massively disproportionate effect on workers on low and middle incomes," said Fianna Fail spokesman on Finance Michael McGrath. "However, it would rub salt into the wounds if some of the best-paid civil and public servants in the country are virtually getting off scot free from the PRSI charge."

In answer to a parliamentary question from Mr McGrath, the Minister for Social Protection Joan Burton revealed that 1,247,560 private sector employees and 73,835 civil and public sector workers will be affected by the PRSI changes.

However, the exclusion of top civil servants from the harshest of the cuts has led to Mr McGrath's claim that some top civil servants will only pay a "miserly" 23 cent per week, or €12 a year in increased tax.

Mr McGrath said this was another example of how "the Government are hellbent on protecting higher earners close to the heart of Government at the expense of the squeezed middle''.

And he noted that had the Government opted "to accept the FF proposals to impose a 3 per cent levy on higher earners, it would have raised €200m that would have given it a real opportunity to reverse its nasty cuts in respite care and child benefit".

This measure will have no impact on an estimated 574,830 employees with weekly earnings not exceeding €352 as no PRSI is payable.

Astonishingly this is not the only "great escape'' being enjoyed by top public service mandarins.

In the run-up to the Budget the coalition experienced a major rift over attempts by Labour to impose "a wealth tax'' via an increase in the amount of USC that high earners above €100,000 pay from 7 per cent to 10 per cent.

The chief beneficiaries of the decision not to impose the hike on PAYE workers earning more than €100,000 a year include government ministers and the Taoiseach, top-level mandarins, judges, semi-state bosses, hospital consultants and third-level lecturers, many of whom earn significantly more than €100,000 per annum.

However the Sunday Independent has learnt that self-employed taxpayers already pay an extra 3 per cent USC charge for all income earned over €100,000.

The tax was imposed in Brian Lenihan's last Budget to balance the books after a last-minute row between the Greens and Fianna Fail but it was not applied to PAYE earners or proprietary directors.

Sunday Independent

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