Government to reverse some Public Secor Pay cuts

Brussels Sprout · 09-08-2014 3:55pm #1

Labour party minister Brendan Howlin announces that some of the Public Sector pay cuts implemented over the past number of years will be reversed. No details of which ones or when exactly this will happen.

Minister for Public Expenditure Brendan Howlin has said some pay and pension cuts in the public sector will be reversed as exchequer finances improve.

Mr Howlin said talks with unions will begin next year, but it is not clear when exactly such measures might come in.

Public sector union IMPACT has welcomed the comments saying pay must move as the economy recovers.

Is there really any merit for this at a time when the budget is still being adjusted to try and make expenditure match income?

Is this a political stunt by the Labour party in the runup to the 2016 general election to match Michael Noonan's talks about cutting income tax?

link

not yet · 09-08-2014 6:05pm

Happy days, now just to reinstate the sick leave scheme and we're back in the good aul days.

bbsrs · 09-08-2014 6:33pm

20 months to the next general election the buying begins.

serenity10 · 09-08-2014 6:48pm

Not a minute too soon: CPSU carrying this country on its back....

km79 · 09-08-2014 6:53pm

article actually says govt will enter talks to see if they will reverse pay cuts and if they do it will be over a period of time. Its pre election spoof. So ye can rest easy . No need to ring Joe Duffy yet about those dasterdly guards, nurses, teachers......

hmmm · 09-08-2014 8:42pm

Ridiculous, utterly ridiculous. We've managed to bankrupt the country with our overspending, and Labour can't wait to get back to increasing wasteful government spending. The health service is barely functioning, and instead of saying that any extra revenue will go towards increased services instead it's going to be diverted into the pockets of the public service workers. Is there any politician in FG who will stand up to them?

Tim Robbins · 09-08-2014 8:46pm

hmmm wrote: »

Ridiculous, utterly ridiculous. We've managed to bankrupt the country with our overspending, and Labour can't wait to get back to increasing wasteful government spending. The health service is barely functioning, and instead of saying that any extra revenue will go towards increased services instead it's going to be diverted into the pockets of the public service workers. Is there any politician in FG who will stand up to them?

It is incredible anyone can consider FG a centre right party. On the largest FG vote ever we still have one of the highest paid public sectors in the world with pretty poor productivity.

The reality here is that the public sector, like grey power just can't be ignored. Every political party has to pander to them.
Whereas in IT where half the people in work in it aren't even Irish and hence can't vote, there is no point pandering to give them anything. Not even a tax credit for a new laptop :-)

tayto lover · 09-08-2014 8:50pm

The Lord taketh away and the Lord giveth back ............. and taketh away again in taxes and charges.

Sheldons Brain · 09-08-2014 9:08pm

hmmm wrote: »

Ridiculous, utterly ridiculous. We've managed to bankrupt the country with our overspending, and Labour can't wait to get back to increasing wasteful government spending. The health service is barely functioning, and instead of saying that any extra revenue will go towards increased services instead it's going to be diverted into the pockets of the public service workers. Is there any politician in FG who will stand up to them?

Immature nonsense. If salaries are increasing then so will those in public services, otherwise the chaos would get worse as anyone capable left.

Irish Steve · 09-08-2014 9:16pm

Can't help thinking that it would be a lot more equitable to reduce one of the multitude of taxes or charges that have been loaded on to everyone, on the basis that everyone would then benefit, instead of pandering to a specific minority, albeit a large and vocal minority.

Yet again, we see the 5 year mind set political thinking coming to the fore. Forget the good of the country, make sure that I can get re-elected in a short while.

It would be so nice to see some politicians that are thinking beyond the next election, who care about what's happening to Ireland Inc over the next 20 years. Can't see it happening any time soon, so we're going to be stuck with the same old garbage all over again.

Mongfinder General · 09-08-2014 9:19pm

hmmm wrote: »

Ridiculous, utterly ridiculous. We've managed to bankrupt the country with our overspending, and Labour can't wait to get back to increasing wasteful government spending. The health service is barely functioning, and instead of saying that any extra revenue will go towards increased services instead it's going to be diverted into the pockets of the public service workers. Is there any politician in FG who will stand up to them?

Taxing public sector workers at 62.5% on everything earned above 32,800 means that any pay rise is clawed back by almost two thirds. Add to that the pension contributions that PS workers must pay into and it's probably closer to 70%. The remaining 30% will get spent by the worker which is subject to VAT and other taxes in some cases.

What is happening here is that Labour/FG have followed their traditional tact of tax, tax, tax. Labour, realising that they haven't a hope of getting re-elected are trying to get as many votes as possible so that some of their TD's will get elected. That's about as much as they have going for them.

Tim Robbins · 09-08-2014 9:53pm

Mongfinder General wrote: »

Taxing public sector workers at 62.5% on everything earned above 32,800 means that any pay rise is clawed back by almost two thirds. Add to that the pension contributions that PS workers must pay into and it's probably closer to 70%. The remaining 30% will get spent by the worker which is subject to VAT and other taxes in some cases.

What is happening here is that Labour/FG have followed their traditional tact of tax, tax, tax. Labour, realising that they haven't a hope of getting re-elected are trying to get as many votes as possible so that some of their TD's will get elected. That's about as much as they have going for them.

Where are you getting 62.5% tax from?

Phoebas · 09-08-2014 10:09pm

Tim Robbins wrote: »

Where are you getting 62.5% tax from?

No doubt the pension contribution is in there somewhere.

billymitchell · 09-08-2014 10:22pm

Bit of a crazy idea, but instead of paying everybody in the public sector more, why don't they use that money to hire more people on the front line?

Gumbo · 09-08-2014 10:41pm

PS employee here, I would rather them get rid of this stupid USC or drop taxes considerably than simply "pay back" our wages, which will be mostly taking back in taxes anyway.

Sleepy · 09-08-2014 10:47pm

or only give the raises to those that actually deserve one...

Mongfinder General · 09-08-2014 10:48pm

Tim Robbins wrote: »

Where are you getting 62.5% tax from?

PAYE 41%
USC 7%
PRSI 4%
Pension Levy 10.5%

Add in compulsory pension contributions of at least 3% and it's stacking up...

barneystinson · 09-08-2014 11:01pm

Bit of a non-story, since the Haddington Road cuts are due to be reversed in 2016 anyway... They'll spend nearly til then in talks...

Voltex · 09-08-2014 11:13pm

barneystinson wrote: »

Bit of a non-story, since the Haddington Road cuts are due to be reversed in 2016 anyway... They'll spend nearly til then in talks...

Isn't 2016 an election year also?
Labour spin docs furiously at work already...

Big Cheese · 09-08-2014 11:14pm

hmmm wrote:

Ridiculous, utterly ridiculous. We've managed to bankrupt the country with our overspending, and Labour can't wait to get back to increasing wasteful government spending. The health service is barely functioning, and instead of saying that any extra revenue will go towards increased services instead it's going to be diverted into the pockets of the public service workers. Is there any politician in FG who will stand up to them?

How is it diverted to their pockets. I work in private sector and my wife works in public. She has a good salary, probably 35% better than mine but the amount of cuts and deductions to her wages is incredible. You dont know what you are really talking about...

Bob24 · 09-08-2014 11:35pm

billymitchell wrote: »

Bit of a crazy idea, but instead of paying everybody in the public sector more, why don't they use that money to hire more people on the front line?

Crazy idea in this country indeed :-)

Having said that, as you said this should only be for some frontline jobs and for many office ones I would personally be in favour of a well paid but lean workforce where delivering improvements and taking ownership of issues is rewarded and where all teams are expected to deliver themselves and the use of consultants/contractors is severely restricted. I think it is the best way to attract qualified and motivated people in the civil service and save costs by improving internal efficiency and reducing contracting costs in the long run.

Bob24 · 09-08-2014 11:46pm

Sleepy wrote: »

or only give the raises to those that actually deserve one...

Exactly!

Also rather that spreading the money evenly across functions, use some of it to increase head counts for frontline jobs which are currently understaffed (from 2 experiences in the past for months, the Garda and the health services could probably use some extra hands).

Godge · 09-08-2014 11:53pm

Another pointless public sector rant thread with not one bit of hard evidence, current facts or reasoned argument.

woodoo · 10-08-2014 1:14am

They can keep the pay rises if they knock that 2 hours extra work per week on the head.

Halloween Jack · 10-08-2014 1:14am

I'm a low paid civil servant myself, but would like to see any spare cash put into job creation myself, the unemployment rate is still way too high.

Would actually like the cash to go toward social/ affordable housing in our cities, get some of those tradesmen back to work.

sabat · 10-08-2014 1:25am

Big Cheese wrote: »

How is it diverted to their pockets. I work in private sector and my wife works in public. She has a good salary, probably 35% better than mine but the amount of cuts and deductions to her wages is incredible. You dont know what you are really talking about...

How old is your wife and how long has she been working in the PS? Presuming she's in good health she'll probably see her 100th birthday and will have several decades of state-backed free money after her retirement, unless the system collapses (which it probably will.) Her current pension is worth way more than she pays for it and any logical private sector worker would give their right arm to pay those deductions for those benefits.

Good loser · 10-08-2014 1:47am

Godge wrote: »

Another pointless public sector rant thread with not one bit of hard evidence, current facts or reasoned argument.

Did I read that there were 22,000 applications for clerical officer jobs in public service?

If so why increase the pay?

barneystinson · 10-08-2014 1:55am

Good loser wrote: »

Did I read that there were 22,000 applications for clerical officer jobs in public service?

If so why increase the pay?

Read some of the posts on this thread and you'll see: http://touch.boards.ie/thread/2057233798/1

Lots of people who would be happy to take the job as a stopgap - but because of the money wouldn't stay in it long term. That's not great from the employer's perspective; the civil service wants low staff turnover.

PeteFalk78 · 10-08-2014 7:20am

sabat wrote: »

......Presuming she's in good health she'll probably see her 100th birthday and will have several decades of state-backed free money after her retirement, unless the system collapses (which it probably will.) Her current pension is worth way more than she pays for it and any logical private sector worker would give their right arm to pay those deductions for those benefits.

Go sit down sabat. You have no idea of the public sector pension scheme.
And if the "logical private sector worker" thinks that the benefits are so good then why didn't they get a job in the public sector themselves? Inexperienced, underqualified? The list could would go on.

10-08-2014 7:23am

I wonder who'll benefit the most, the CO's who barely clear minimum wage or the 40k+ a year ones. I really don't know.

Tim Robbins · 10-08-2014 10:15am

Mongfinder General wrote: »

PAYE 41%
USC 7%
PRSI 4%
Pension Levy 10.5%

Add in compulsory pension contributions of at least 3% and it's stacking up...

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

Tim Robbins · 10-08-2014 10:22am

Tim Robbins wrote: »

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

The big drawback of the public sector is that once you want the cake no-one else will want you. If you were working in IT public sector and tried to get back into private sector you could really struggle. That means you are signing up to be a lifer.

Now, if you are on some cushy number pulling in 80K a year (twice what you get in private sector when you factor in all the benefits) that might suit you but when that little bit of boredom kicks in to every job and you just want a change you are trapped.

https://www.youtube.com/watch?v=tSNWeXGZMcU

You have to be a very type of "settled" person to hack this.
Another thing, I work in the private sector and I have come across a few wasters in my time. They are a pain to work with. Now, at least there is the possibility they get bad reviews etc or even get the sack.

In the public sector nothing happens. That would reck my head.

+ most common people slagging you thinking you do nothing.

It is like being a D4 head. Has its advantages (access to better looking women, no scumbags living near you) but given its advantages, a lot of people wouldn't want to be one. Same with public sector.

Sleephead · 10-08-2014 10:23am

Tim Robbins wrote: »

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

There's a contribution AND a levy.

But don't let the facts get in the way of your diatribe

Icepick · 10-08-2014 10:47am

as exchequer finances improve

OK
National debt
2008 - 65,000,000,000
2014 - 180,000,000,000

as % of GDP
2008 - 45%
2014 - 120%

Mongfinder General · 10-08-2014 10:55am

Tim Robbins wrote: »

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

The levy is a tax. I will never see one penny of it back. An here's why. I already pay into two pension schemes. My own scheme and a separate spouses and children's scheme. These are compulsory. I do not have a choice. I do not want to pay into any of the above because by the time I reach retirement there will be nothing left in these schemes. These schemes will be insolvent because of too many dependants and too few contributors. It's actually worse than a tax. You expect something back from taxation. I am likely to get very little.

Bob24 · 10-08-2014 10:58am

Icepick wrote: »

OK
National debt
2008 - 65,000,000,000
2014 - 180,000,000,000

as % of GDP
2008 - 45%
2014 - 120%

Ah don't be spoiling our national party now ;-) Since when do facts matter?

Little CuChulainn · 10-08-2014 4:22pm

sabat wrote: »

How old is your wife and how long has she been working in the PS? Presuming she's in good health she'll probably see her 100th birthday and will have several decades of state-backed free money after her retirement, unless the system collapses (which it probably will.) Her current pension is worth way more than she pays for it and any logical private sector worker would give their right arm to pay those deductions for those benefits.

I'm not sure if this is a genuine post or not. Her 100th birthday? The average life expectancy is 78. That's 20 years after the earliest retirement age for most public service workers. That's after paying 10% of her wage into the scheme for 40 years plus PRSI. I've yet to see someone actually do workings on how much a public sector wage actually costs.

PeteFalk78 · 10-08-2014 7:58pm

Little CuChulainn wrote: »

I've yet to see someone actually do workings on how much a public sector wage actually costs.

Say the average public sector pay is 60k a year I think, so lets take it from there for the average post 1995 public sector worker.

That person would pay roughly €130 in pension related deductions a week.

That's 270k contributed to a pension over 40 years (we'll bring this down to 240k because of scales and salaries)

That person can expect a lump sum of 90k upon retirement. That brings the pot down to 150k of own monies put in. Excluding any SW handouts...... that person is entitled to 18k a year pension. 150k/18k = 8 years pension before they even reach parity with what they've contributed.

Is that a lush pension?

Tim Robbins · 10-08-2014 8:19pm

Mongfinder General wrote: »

The levy is a tax. I will never see one penny of it back. An here's why. I already pay into two pension schemes. My own scheme and a separate spouses and children's scheme. These are compulsory. I do not have a choice. I do not want to pay into any of the above because by the time I reach retirement there will be nothing left in these schemes. These schemes will be insolvent because of too many dependants and too few contributors. It's actually worse than a tax. You expect something back from taxation. I am likely to get very little.

You get a defined benefit pension. That's worth a lot more than 10% of your salary.

Little CuChulainn · 10-08-2014 8:46pm

PeteFalk78 wrote: »

Say the average public sector pay is 60k a year I think, so lets take it from there for the average post 1995 public sector worker.

That person would pay roughly €130 in pension related deductions a week.

That's 270k contributed to a pension over 40 years (we'll bring this down to 240k because of scales and salaries)

That person can expect a lump sum of 90k upon retirement. That brings the pot down to 150k of own monies put in. Excluding any SW handouts...... that person is entitled to 18k a year pension. 150k/18k = 8 years pension before they even reach parity with what they've contributed.

Is that a lush pension?

Certainly sounds like one. I would have one or two questions though. Where do you get the figure of 60k average wage? I presume that must include all management ranks and upwards. How did you calculate that lump sum of 90k? Is the 18k per year inclusive of the standard state pension?

barneystinson · 10-08-2014 8:48pm

Tim Robbins wrote: »

You get a defined benefit pension. That's worth a lot more than 10% of your salary.

Doesn't change the fact the fact that the so called pension levy is a pay reduction. It was confirmed as such by the minister who introduced it. It isn't a pension contribution.

This crap about the DB pension being "worth more than 10%" - SO WHAT! Most large employers who operate occupational pension schemes have employers' contributions which often match the employees' contributions...

Always number 1 · 10-08-2014 8:59pm

Old news people - when this levy was introduced, the unions agreed to it on the basis that the Government promised that once things started picking up again, the levy would be reversed starting with the lowest paid workers..

Can someone point me in the direction of the "Hospital consultants pay cuts to be reversed" thread
Thanks

PeteFalk78 · 10-08-2014 9:23pm

Little CuChulainn wrote: »

Certainly sounds like one. I would have one or two questions though. Where do you get the figure of 60k average wage? I presume that must include all management ranks and upwards. How did you calculate that lump sum of 90k? Is the 18k per year inclusive of the standard state pension?

I think the average public sector wage is between 50k-60k.
Lump sum of 90k as it is 1 1/2 times finishing salary of 60k
18k per year is not inclusive of standard state pension which is 12k on top.

I'm trying to show people how much money is contributed to the pension.

PeteFalk78 · 10-08-2014 9:24pm

Little CuChulainn wrote: »

Certainly sounds like one.

What's so lush about it?

Little CuChulainn · 10-08-2014 9:31pm

PeteFalk78 wrote: »

I think the average public sector wage is between 50k-60k.
Lump sum of 90k as it is 1 1/2 times finishing salary of 60k
18k per year is not inclusive of standard state pension which is 12k on top.

I'm trying to show people how much money is contributed to the pension.

The average public sector pay may be that but it is not what many make. It is distorted by high earners in middle to upper management. As is the lump sum.

Tim Robbins · 10-08-2014 9:34pm

barneystinson wrote: »

Doesn't change the fact the fact that the so called pension levy is a pay reduction. It was confirmed as such by the minister who introduced it. It isn't a pension contribution.

This crap about the DB pension being "worth more than 10%" - SO WHAT! Most large employers who operate occupational pension schemes have employers' contributions which often match the employees' contributions...

Do the Math. To make a defined contribution benefit worth as much as a defined benefit one you would need to be putting in about 40% of your salary.

So 10% is a small price to pay for something that is worth about 40% of your salary.

Neon_Lights · 10-08-2014 9:36pm

I think theyre pumping up their payments as a prempt to them getting destroyed in the Next General Election, They don't care really and are just showing their true colors.

I think in order to stop this a G.E. Should be called every two years, as near the end of a stint, politicians care little for public initiatives and more for their own security and continuity.

barneystinson · 10-08-2014 9:49pm

Tim Robbins wrote: »

Do the Math. To make a defined contribution benefit worth as much as a defined benefit one you would need to be putting in about 40% of your salary.

So 10% is a small price to pay for something that is worth about 40% of your salary.

No, you do the mathS.

Put it up on the board, show your workings, state your assumptions. Otherwise it's just all hot air.

Brussels Sprout · 10-08-2014 9:57pm

Neon_Lights wrote: »

I think in order to stop this a G.E. Should be called every two years, as near the end of a stint, politicians care little for public initiatives and more for their own security and continuity.

Would this not just exacerbate the problem?

Neon_Lights · 10-08-2014 10:00pm

Brussels Sprout wrote: »

Would this not just exacerbate the problem?

Depends how you look at it, it would definitely weight public satisfaction with initiatives more highly as there is an increased chance of the government losing power more frequently. That would be my thoughts on the matter.

Kristopherus · 10-08-2014 10:01pm

Tim Robbins wrote: »

Do the Math. To make a defined contribution benefit worth as much as a defined benefit one you would need to be putting in about 40% of your salary.

So 10% is a small price to pay for something that is worth about 40% of your salary.

You are omitting the fact that the NTMA have use of the PS pension contribution from day 1. A nice little earner interest-wise for the National Pension fund. The same fund that had to be raided to bail out the problems caused by ........... the private sector.:pac:

Government to reverse some Public Secor Pay cuts

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