Unravelling of pensions emergency financial legislation will cost €90 million next year

Minister says pensions worth up to €34,000 will be fully restored by January 1st 2018

Paschal Donohoe told the Dáil that from January 1st next year all public service pensioners with annuities worth up to €34,132 would be exempt from the charge imposed in 2011 under the Fempi legislation.   Photograph: Dara Mac Dónaill

Paschal Donohoe told the Dáil that from January 1st next year all public service pensioners with annuities worth up to €34,132 would be exempt from the charge imposed in 2011 under the Fempi legislation. Photograph: Dara Mac Dónaill

 

The restoration of public service pensions will cost €90 million next year with the unravelling of emergency legislation implemented during the economic crash, according to the Minister for Public Expenditure and Reform.

Paschal Donohoe told the Dáil that from January 1st next year all public service pensioners with annuities worth up to €34,132 would be exempt from the charge imposed in 2011 under the Fempi (Financial Emergency Measures in the Public Interest) legislation.

The emergency laws are being unravelled gradually and the Minister said that the vast majority of public sector pensioners, those with an annuity up to €54,000 would have their pensions fully restored by the beginning of 2020.

He said that those still affected by the cuts next year would be better off by €1,680 from January 1st.

Mr Donohoe told Fianna Fáil public expenditure and reform spokesman Dara Calleary that the reduction in pensions - called the PSPR (Public Service Pension Reduction) - introduced six years ago during the economic downturn, was being unwound in three stages.

Pensioners affected by the cuts were receiving very substantial increases each year from January 1st 2016 until January 1st next year.

The charge on public pensions was introduced at a rate of six per cent on pensions between €12,000 and €24,000, and at nine per cent for pensions up to €60,000. The charge was 12 per cent on pensions up to €100,000 and 20 per cent for those on more than €100,000.

The improvements for 2019 and 2020 will take effect if the Public Service Pay and Pensions Bill, published this week, is passed by the Oireachtas and improve annual pensions of up to €54,000.

Mr Calleary called for the Alliance of Retired Public Servants to have a role in representing public service pensioners generally, rather than being “merely an add-on in public service pay talks”.

But the Minister said that it would not be appropriate to give the alliance formal status. He had met its representatives and his department had done its utmost to accommodate them as far as possible.

But “I always have to navigate a trade-off” and the State had a clear obligation to restore pensions up to a certain point.

Mr Donohoe also told Independent TD Michael Collins that he had “no statutory function to deal with the pensions anomaly affected 36,000 people, the majority of them women, affected by pension changes in 2012.

Mr Collins said the anomaly was a complete violation of the rights of the women who worked hard in their homes.

“Many Deputies took extra money for themselves in pay reform and €5 million has been made available for a PR budget, so money can be found if there is a need, and there is a desperate need to address this issue and to address it properly”.

He said it had to be addressed in the next budget but the Minister said “I am not in a position to do that”.