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Tuesday 12 December 2017

Judges to be hit with pay cuts of €36,000

Judiciary accept that poll will back proposal to reduce their salaries

Michael Brennan and Dearbhail McDonald

THE country's most senior judges are facing pay cuts of at least €36,000.

Judges privately admitted last night that voters would overwhelmingly back an amendment to the Constitution later this year which will allow their salaries to be cut.

It means that their pay will be reduced by up to 15pc. That would mean a cut of €44,000 for Chief Justice John Murray, while the salaries of his six colleagues on the Supreme Court will be slashed by €38,000.

The 36 High Court judges will be hit by a salary reduction of around €36,000.

This will be the first time members of the judiciary have suffered compulsory salary reductions. They have previously escaped cuts due to the provisions of the Constitution, which protect their salaries.

As well as the pay cuts, all 147 judges will be required by law to pay the pension levy -- including the 21 who refused to sign up for the voluntary scheme agreed with the Revenue Commissioners two years ago.

There is also an expectation among most judges that they will suffer further pay reductions in the December Budget.

This would bring their salaries closer into line with Taoiseach Enda Kenny, who has cut his own pay to €200,000.

The referendum on judges' pay will take place on the same day as the presidential election in November.

Justice Minister Alan Shatter confirmed yesterday that judges would get the same pay reductions as public servants with similar salaries. However, he said the cuts would not be retrospective and would only take effect from the date of the passing of the referendum.

Last night, senior legal sources said the referendum on judicial pay was "a non-issue" as some 85pc of the country's judges had already signed up to the Revenue Commissioners' voluntary pension-levy scheme, reducing their salaries by 10pc.

Yesterday, Mr Shatter said he did not expect there to be a backlash from judges if pay cuts were imposed on them.

"I have the greatest faith in the patriotism of our judiciary, the independence of our judiciary, in their understanding of the financial difficulties confronted by the State and I'll be astonished if there was any such reaction," he said.

Until now, judges' wages have remained untouched by the public sector pay cuts, which have forced more than 300,000 public sector workers to take an average 6.2pc reduction.

Most judges signed up for the pension levy voluntarily and paid €1.26m in total to the Revenue last year.

But, as predicted by former Supreme Court judge Donal Barrington, there was "a small rump of people" -- 21 judges -- who refused to do so.

They will be obliged to pay the levy under the new rules.

It comes just two months after Mr Murray raised concerns about changes to the tax treatment of judges' pensions at a meeting with the Taoiseach.

In last December's Budget, a figure of €2.3m was set as the maximum pension fund allowable for tax purposes. This would mean judges with pension funds worth more than this face a large tax liability.

Mr Kenny later publicly rejected the calls from judges to protect them from higher taxation by declaring that they would not get special treatment.

The pension changes could see some judges pay out up to €600,000 in a lump sum upon their retirement.

Under the new rules, a punitive tax rate of 72pc could apply on any sum over the €2.3m cap. It is understood that some senior judges fall into this bracket.


Legal sources said the rule changes had already resulted in some potential judicial candidates not applying to become judges amid fears that their pensions would be decimated.

"There has never been a question of the judiciary seeking a special deal," said one senior judge. "But some judges will be wiped out on retirement by these (pension) changes."

Fianna Fail justice spokesman Dara Calleary said he expected the referendum on judges pay to be passed easily, and indicated that his party would support it.

The public will also be asked to vote on two other key issues designed to increase the powers of the Oireachtas.

The first is to give committees the power to compel witnesses to attend and to make findings of fact -- which would allow the Dail to carry out the long-awaited banking inquiry.

The second proposal is to give TDs and senators the legal right to protect the identities of whistleblowers who give them confidential information in the public interest.

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