THE GOVERNMENT has sought legal advice over its plans to reduce the pensions of former senior civil servants, judges and politicians in next week’s budget.
Big increases in motor tax will also form part of the cost-cutting measures, along with at least 4 cent a litre on petrol, according to informed sources.
Attorney General Máire Whelan has been asked to advise on the feasibility of applying a further reduction to the pensions of the highest earners in the public service.
Under the public service pension reduction introduced by the previous government last January, a reduction of 12 per cent was applied to pensions over €60,000. It is now planned to introduce a second tier by applying a bigger reduction to those receiving pensions over €100,000.
The exact amount of the reduction has yet to be decided, while Ms Whelan has been asked to advise on whether it is legally fair and equitable to impose further reductions on existing pensioners.
“This is something Ministers want to do but the issue is whether it can be done,” said one source.
Minister for Communications, Energy and Natural Resources Pat Rabbitte said yesterday the proposal for a “super-tax” on the highest pensions was a “good idea, if it can be done”. Another Labour colleague, Minister for Social Protection Joan Burton, has already hinted those on high salaries and pensions could be targeted in the budget.
Figures published last month show that 30 former politicians are receiving pensions over €100,000, while over 100 senior civil servants are in the same bracket. Thirteen former Supreme Court and High Court judges are in receipt of pensions over €100,000, according to figures obtained by The Irish Times.
The Government is also expected to announce a review of existing arrangements for paid sick leave across the public service.
At present, employees can avail of up to seven days’ uncertified sick leave in a 12-month period. Staff can receive full pay for certified sickness absence for up to six months in one year, and half-pay thereafter, subject to a maximum of 12 months’ paid sick leave in any period of four years.
Separately, a spokesman for Minister for Enterprise and Jobs Richard Bruton confirmed Forfás has provided him with a report on the potential impact on competitiveness and employment of the proposal to transfer responsibility for paying sick pay in the first month of illness from the Department of Social Protection to employers. He said the Minister would take the report into consideration “in contributing to pre-budget discussions”.
The Government is examining whether to remove an exemption from PRSI payments on private income from public servants such as hospital consultants. New controls may be introduced to ensure the tax take on high earners from other incomes such as rents and investments is maximised.
Today’s Cabinet meeting has been postponed because of the funeral of the Taoiseach’s mother, Eithne Kenny. However, Mr Kenny’s state of the nation address on television is expected to go ahead on Thursday.
Minister for Communications Phil Hogan confirmed he planned to increase motor tax but denied reports the charge for low emission cars could rise by as much as 63 per cent. "I see a headline of a 63 per cent increase in motor tax. I don't know where anybody could calculate that particular figure from," he told RTÉ's The Week in Politics. "There is no truth in that particular matter, but there is going to be adjustments in the bands and the rate."