Thursday 23 May 2019

Unions turned down in bid for refund of €17m pension levy

Shay Cody, Chairman of the ICTU Public Services Committee pictured with Sheila Nunan, Vice Chairman. Pic. Frank McGrath.
Shay Cody, Chairman of the ICTU Public Services Committee pictured with Sheila Nunan, Vice Chairman. Pic. Frank McGrath.

Anne-Marie Walsh

UNIONS tried to get a clawback of the public sector pension levy this year - worth €17m in total - but were refused, new documents reveal.

But the main public sector union, Impact, says the Department of Public Expenditure and Reform has agreed that the refund will be paid next year.

The move came ahead of talks on pay restoration to the country's 287,780 State employees, due to kick off this summer.

Since last year, unions have demanded that the pension levy should be the starting point at talks, and Government sources recently indicated it will either be cut or abolished.

Documents released under Freedom of Information legislation show the body representing the public sector unions asked spending minister Brendan Howlin to cut the levy from January 1 this year - which would put more money back in public servants' pockets. However, this was refused.

The levy, introduced by the former Fianna Fail/Green coalition, cut incomes by an average 7pc in 2009, as public servants paid bigger contributions to their pensions.

The letter from the Public Services Committee of the Irish Congress of Trade Unions said it was anxious to make progress on the issue.

The union's request for the rebate was submitted after they reached agreement with the Government in the Haddington Road deal for a reduction in the levy from last year.

This meant servants have paid €125 less towards their pension contributions, as more earnings were exempted from the levy.

However, in the letter, sent on September 23, unions tried to recoup an extra half-year payment, worth another €62 - or a total of over €17m - on top of the earlier €125 reduction.

They are seeking to recoup the half-year payment to cover the six months after the Haddington deal was brokered, between July and December.

The chairman of the Public Services Committee, Shay Cody, confirmed that the half-year rebate will be paid in 2016 but was turned down by the Department of Public Expenditure and Reform for this year.

It is likely that the €62 due to each public servant will be spread out over a number of paydays rather than in a once-off lump sum.

However, payment of this outstanding lump sum is likely to be overtaken as unions prepare to make demands for restoration of cuts to earnings worth over €2.2bn.

Irish Independent

Editor's Choice

Also in Irish News