| 13.3°C Dublin

€2.2bn - the bill to reverse all pay cuts in the public sector

Close

Minister for Public Expenditure and Reform, Brendan Howlin. Photo Frank Mc Grath

Minister for Public Expenditure and Reform, Brendan Howlin. Photo Frank Mc Grath

Minister for Public Expenditure and Reform, Brendan Howlin. Photo Frank Mc Grath

Reversing all the public sector pay cuts would cost the taxpayer almost €2.2bn - the equivalent of an entire budget adjustment.

But there are calls to keep the pension levy as a contribution to the gold-plated public sector pension pots.

The pay rise would work out at €7,600 per worker, if spread across the nearly 300,000 staff in the public sector.

Public Spending Minister Brendan Howlin has announced there will be talks on the restoration of pay cuts to the public sector made during the economic crisis.

However, Mr Howlin has stressed not all the "emergency" pay cuts will be restored and any reversals will be done over time.

The first pay rises for public sector workers are expected in late 2016 or 2017.

The cuts to nearly 300,000 public sector workers were made under emergency legislation, prompted by the economic collapse.

The Department of Public Expenditure has confirmed the value per annum of each measure. These are:

€900m for the pension levy, which was worth an average of 7.5pc of salary;

€950m for the pay cut on a sliding scale, dependent on salary size, but worth an average of 6.5pc;

€125m for the pensions cut for retired public sector workers;

€210m pay cut for higher-paid public servants earning more than €65,000 and pensioners on more than €32,500.

All told, to reverse all the measures in one fell swoop would cost the taxpayer €2.185m - or an average pay rise of €7,580 for each of the 288,200 workers in the public sector.

But the minister's officials have stressed this is not his intention.

"Minister Howlin has emphasised that any restoration of these measures will not be a once off, which would be unsustainable in terms of Government finances, and that any measures taken will have regard to overall fiscal requirements," a spokesman said.

Meanwhile, IBEC chief executive Danny McCoy says there is an argument for keeping the public sector pension levy.

The pension levy was the first measure introduced in 2009 and was hugely contentious.

Mr McCoy said he felt the pension levy should be the "last argument" around reversal of the cuts.

He said the pension levy could be regarded as a contribution towards the very generous pension scheme in the public sector.

Mr Howlin announced the pay talks last weekend.

hnews@herald.ie


Privacy