How worse off are you with this Levy

Stacksey

€4500 for me, nightmare

jetski

How is it worked out?

AARRRGH

jetski wrote: »

How is it worked out?

1% of your gross wage I believe.

EDIT: Didn't realise you were talking about the government employee one

Tipsy Mac

€4500, that means you are on about €60,000 a year with a guaranteed generous pension when you retire and job security, hardly the same as being sent to Siberia to work in a coal mine for €2 a week. If I want the same level of pension I would have to give 25% of my current income and even then the final figure is not guaranteed.

leeroybrown

NOTE: These figures have now been superseded by the actual calculation method.

As things currently stand the pension levy will be implemented with the following rates:

• 0% on <€15,000
• 3% on €15,000
• 5% on €25,000
• 6.4% on €35,000
• 7.2% on €45,000
• 7.7% on €55,000
• 8.1% on €65,000
• 8.5% on €85,000
• 8.8% on €100,000
• 9.2% on €150,000
• 9.4% on €200,000
• 9.6% on €300,000

You pay the highest rate your gross salary is above.

You also pay the income levy (1% for most people) introduced in the last budget.

Source of figures.

EDIT - For the benefit of anyone who's been living under a rock this week this new pension levy *only* applies to public sector workers

EDIT2 - Figures no longer valid. See message above.

Stargal

My boyfriend will be getting a cut of over €2,500. As SIPTU have said, this is a pay cut being dressed up as a pension levy. Joke of a way to try to solve the problem.

AARRRGH

Stargal wrote: »

Joke of a way to try to solve the problem.

I agree dressing a pay cut up as a levy is a joke, but you know what, most people don't see it as a pay cut or an increase in tax, so it's a smart move by FF.

yabadabado

AARRRGH wrote: »

I agree dressing a pay cut up as a levy is a joke, but you know what, most people don't see it as a pay cut or an increase in tax, so it's a smart move by FF.

dont think its a smart move by FF.they look a shambles and whos to say there wont be industrial action within next few weeks

Stacksey

i reckon just stop paying the guards and prison wardens so much bloody over time, ive been saying it for years now, a day out in croke park for them at tripple time, ridiculous

Miss Minnie

I'm hating this already, I think its going to widen the gap between public and private workers even further. Do people not realise that pay cuts of similar (actually more to be honest) are being handed out every day to us private workers? I earn 35k, so if I was public I would have a generous pension, safe job and a 6.4% paycut. However in reality I am facing a 10% paycut (and vulnerable job like all my colleagues) which is gross of 67euro a week yet I will be glad to take that rather than redundancy (which is a possibility too)

RTE news reported that over 90% of Dublin companies are passing paycuts of up to 10% to staff.

Don't get me wrong, I do feel sorry for everybody whos belts are going to be tighter after this, I will be the same myself very soon. But its just very hard to hear union leaders saying that hard working public staff don't deserve this, I work hard too! But it just seems to be the way Ireland is heading

Jet Black

AARRRGH wrote: »

I agree dressing a pay cut up as a levy is a joke, but you know what, most people don't see it as a pay cut or an increase in tax, so it's a smart move by FF.

First complement ive seen about FF:D

I wish I was offered this in my job but unfortunately I was just let go. Did not have the option of a pay cut.

Alessandra

It is in essence a pay cut. My colleagues are down between three and five thousand. I am temporary so happy to be in employment at all. The talk at work is of cutting direct debits, non-essential spending, revising their VHI and more trips to aldi/lidl or the north. A few of their spouses are now unemployed so it's a double blow. It's going to get a lot worse. People tightening their belts, not going to the pub, not buying clothes etc will all contribute to further job losses. Where is the economic stimulus when you need one?

leeroybrown

Stargal wrote: »

As SIPTU have said, this is a pay cut being dressed up as a pension levy. Joke of a way to try to solve the problem.

It's in the form of a 'pension levy' for a number of reasons. Cutting the pay scales would likely to face a much more awkward challenge to get through. Cutting the pay scales also affects the pension calculations of retired staff which would be awkward to get through. Conveniently, it's more politically saleable as they can tie it in with the issue of defined benefit pensions

lily lou

I currently woring 2 jobs and am barely getting by, my main job is in the public sector and I earn €31,000 my second job brings me around €1500 into the 41% tax bracket I'm just wondering will the levy take me out of this bracket or will I still be in that bracket as I'm not actually getting a pay cut? My pension up to now has been a pre tax deduction will the levy be the same?

leeroybrown

Based on the currently available details it looks like you'll pay 5% (€1550) of your €31,000 in the form of an additional pre-tax deduction. This will reduce your tax liability and effectively take you out of the higher band. Your pension contribution will remain a pre-tax deduction calculated as before. It won't change.

Wishbone Ash

About €8,000 (but at least overtime is not reckonable for pension so that's a plus).

leeroybrown

Wishbone Ash wrote: »

About €8,000 (but at least overtime is not reckonable for pension so that's a plus).

Have you actually seen any confirmation that overtime won't be included? I've taken a look and all I see mentioned is 'gross pay' rather than 'basic pay'. I would take that to mean that it includes all income that comes through your payslip but perhaps it's just the media's choice of words.

hunnymonster

It's wrong to assume everyone having to deal with the public service levy has job security and guaranteed pension. I'm on a fixed term contract (in a university), no security and lost 7.2 % in this.

Stacksey

Wishbone Ash wrote: »

About €8,000 (but at least overtime is not reckonable for pension so that's a plus).

how are you getting overtime? i was of the opinion that no overtime was being paid anywhere

loyatemu

hunnymonster wrote: »

It's wrong to assume everyone having to deal with the public service levy has job security and guaranteed pension. I'm on a fixed term contract (in a university), no security and lost 7.2 % in this.

and you get a public service pension there? I didn't think the Unis would be affected by this...

bear in mind also, the levy is a pre-tax deduction, some of the figures being bandied about are the gross amount, the net deduction will be less (still a pain in the ass though).

hunnymonster

loyatemu wrote: »

and you get a public service pension there? I didn't think the Unis would be affected by this...

no but we have a defined contribution scheme (so nothing guaranteed, I think I currently pay 6.5% gross which is matched by my employer but I could be wrong on this) but we will still be paying the pension levy as we are primarily funded by the HEA which is a public body. At least that is what I have been told by the people who are dealing with this.

biko

Where western leaders fall

• 0% on <€15,000
• 3% on €15,000
• 5% on €25,000
• 6.4% on €35,000
• 7.2% on €45,000
• 7.7% on €55,000 Vladimir Putin
• 8.1% on €65,000
• 8.5% on €85,000
• 8.8% on €100,000
• 9.2% on €150,000 Kevin Rudd AUS
• 9.4% on €200,000 Nicolas Sarkozy FR, Angela Merkel DE, Gordon Brown GB
• 9.6% on €300,000 Biffo, Obama

GoneShootin

This calculator might be of some use....

Milly82

I'm going to be down €30 a week, I'm fuming over this. It might not seem a lot to people but it's a lot to me. I'm struggling as it is. Just bought an apartment with my boyf last year and times are hard. Can't believe they are doing this to us. They can't get away with it, surely?

InReality

In a private company you would generally have to a agree - i.e. sign a new contract , if your boss wanted a pay cut.

Its a bit of a grey area legally IMHO whether the govt could impose a pay cut.
Imposing a pension levy is a like a pay cut in practical terms , i.e. cash at the end of the week, but if they are bringing in new legisislation to cover it then, it might need a court case to sort it out.

And then Union would be voting on it too...

nesf

Remember guys because this is coming out of gross pay before tax is deducted, you effectively get tax relief on it. So your take home pay won't be reduced by the full amount of the levy.

i.e. say I earn 70K a year and my levy amount is 1K (not using real numbers to make this clear)

My take home pay isn't reduced by 1,000 euro, it's reduced by 590 euro because the amount of my wage subject to 41% tax is reduced by 1,000 euro. People (and unions) are forgetting this.

BroomBurner

nesf wrote: »

Remember guys because this is coming out of gross pay before tax is deducted, you effectively get tax relief on it. So your take home pay won't be reduced by the full amount of the levy.

i.e. say I earn 70K a year and my levy amount is 1K (not using real numbers to make this clear)

My take home pay isn't reduced by 1,000 euro, it's reduced by 590 euro because the amount of my wage subject to 41% tax is reduced by 1,000 euro. People (and unions) are forgetting this.

Not everyone in the PS is on the higher tax band though, so won't receive the same reductions.

Anyone out there co-habiting with someone on the higher tax band, get married and start managing your tax credits to get the most of them :cool:

nesf

BroomBurner wrote: »

Not everyone in the PS is on the higher tax band though, so won't receive the same reductions.

Yup but most teachers etc probably are paying some tax at 41%.

BroomBurner wrote: »

Anyone out there co-habiting with someone on the higher tax band, get married and start managing your tax credits to get the most of them :cool:

Exactly. The present tax system punished people for co-habiting and not getting married. Which is a joke if they have kids and one of them is a stay-at-home parent.

deepriver

this may sound trollish but state employment is almost like a form of deluxe welfare for some of the less skilled workers... I know a couple of guys working in civil and they wouldnt be fit to enter the private sector, basically reliable and nice but thick as sh*t...

And for all those talented and hard working civil servants, I think you guys should take the hit on the chin and move on, you are keeping your base salaries which are very generous comparable to other countries and you are very very lucky to have secure jobs... I would trade with you right now...

nesf

deepriver wrote: »

this may sound trollish but state employment is almost like a form of deluxe welfare for some of the less skilled workers... I know a couple of guys working in civil and they wouldnt be fit to enter the private sector, basically reliable and nice but thick as sh*t...

And for all those talented and hard working civil servants, I think you guys should take the hit on the chin and move on, you are keeping your base salaries which are very generous comparable to other countries and you are very very lucky to have secure jobs... I would trade with you right now...

You're right it does sound very trollish, anything to contribute apart from gross generalisations based on a couple of guys you know?

deepriver

yes absolutely... if you just read the second half of my post about the other kind of civil servants I am sure exist

The_Conductor

Stargal wrote: »

My boyfriend will be getting a cut of over €2,500. As SIPTU have said, this is a pay cut being dressed up as a pension levy. Joke of a way to try to solve the problem.

It is a paycut- the reason they are doing it this way is so the current pensioners don't have a reduction in their pensions- this has been acknowledged.

lily lou

Got this on Impact website

So by the looks of it people on €40k lose less than people on €33k to €39k because they get tax relief at 41% very unfair!!

Also people need to remember not all public servants have job security, I work as a Special Needs Assistant and our jobs depend on student numbers, I'm safe enough as it operates on a last in first out basis but 4 of our staff may have no job to come back to in September.

leeroybrown

The Dept. of Finance have released a document explaining how it's calculated. It's in keeping with IMPACT's release. If the morons had just said that when they were announcing it they'd have saved a whole lot of confusion.

EDIT: An important quote from the document:

A saving of €1.4bn is to be achieved in a full year, largely as a result of a new pension-related deduction which will apply to the total earnings of all public servants.

I think it's reasonably clear that 'total earnings' would include all overtime and other non-basic payments that is are being paid to some public servants. I wouldn't have expected the government to miss out on the extra claw-back anyway.

nesf

lily lou wrote: »

So by the looks of it people on €40k lose less than people on €33k to €39k because they get tax relief at 41% very unfair!

Yup, expect them to give some ground on this point though I'd say.

Godge

leeroybrown wrote: »

I think it's reasonably clear that 'total earnings' would include all overtime and other non-basic payments that is are being paid to some public servants. I wouldn't have expected the government to miss out on the extra claw-back anyway.

Yep, from what I hear it applies to all earnings and it may even apply to those not in the pension scheme. In effect, it is a pay cut, but as the nurses pointed out, that could not be done legally so the levy is the other way.

One thing some people will need to watch out for is the revenue restrictions on pension relief. Younger people at higher levels who are buying added years through AVCs may have a problem.

nesf

Godge wrote: »

One thing some people will need to watch out for is the revenue restrictions on pension relief. Younger people at higher levels who are buying added years through AVCs may have a problem.

I don't think that'll effect people. Private sector pensions are paid out of net salary, we apply to the revenue to get tax back based on this. This is different, this a levy taken first from gross pay, meaning that people won't be applying for pension relief. I imagine people will escape this.

glaston

I work in the private sector, we had a good pension (defined benefit like public sector workers but not as high final pay out). It has been scrapped for a defined contribution system, basically I havent a clue what I will end up getting, possibly nothing. Unfortunately this is happening to lots of private sector workers, in the near future very few people, apart from the public sector, will have pension security.

Think of the levy as an investment or a way of securing a good pension.

More generally I wish the government and opposition parties would get the fingers out and start working together constructively. Another friend got laid off from a multinational today. Its a few weeks until his wedding.:(

The_Conductor

nesf wrote: »

Yup, expect them to give some ground on this point though I'd say.

The current proposal is to reduce the tax benefits on pension contributions for everyone to the lower rate- but possibly introduce a topup scheme modeled on the SSIA scheme. Its only at the discussion stage at this point.

loyatemu

hunnymonster wrote: »

no but we have a defined contribution scheme (so nothing guaranteed, I think I currently pay 6.5% gross which is matched by my employer but I could be wrong on this) but we will still be paying the pension levy as we are primarily funded by the HEA which is a public body. At least that is what I have been told by the people who are dealing with this.

there's no way you should be paying this if you're on a DC pension scheme. Your pension is not guaranteed, is not going to be paid by the govt, and at the moment is effectively worthless. I think you've been misinformed... I'm also work in a HEA-funded job with a DC pension and I'm not affected by the levy.

The_Conductor

loyatemu wrote: »

there's no way you should be paying this if you're on a DC pension scheme. Your pension is not guaranteed, is not going to be paid by the govt, and at the moment is effectively worthless. I think you've been misinformed... I'm also work in a HEA-funded job with a DC pension and I'm not affected by the levy.

Why not?
Its a scheme modeled on the Department of Finance's Model Superannuation scheme, and approved by the department.
Any post 1995 public sector staff are only guaranteed that portion of their pension that remains after the COPC standard deduction removes the contributory element of the pension- which on average is less than 50% of the 1/2 final salary pension that gets bandied about. The other half isn't guaranteed at all- and could potentially be denied in part or whole. There are pages of conditions attached to the COPC calculations.

Godge

nesf wrote: »

I don't think that'll effect people. Private sector pensions are paid out of net salary, we apply to the revenue to get tax back based on this. This is different, this a levy taken first from gross pay, meaning that people won't be applying for pension relief. I imagine people will escape this.

Lenihan has already said that levy will be treated the same as private sector tax relief. Take the sample of a Professor in a university who came back to Ireland and got a position in his mid-30s. Salary is €150,000. Maximum tax relief is 15%. Already pays 6.5%, levy for him is around 9%. If he is trying to purchase addtional years or some other AVC scheme, he will be in breach of Revenue rules.

Godge

smccarrick wrote: »

The current proposal is to reduce the tax benefits on pension contributions for everyone to the lower rate- but possibly introduce a topup scheme modeled on the SSIA scheme. Its only at the discussion stage at this point.

do you have more details?

leeroybrown

Godge wrote: »

Lenihan has already said that levy will be treated the same as private sector tax relief. Take the sample of a Professor in a university who came back to Ireland and got a position in his mid-30s. Salary is €150,000. Maximum tax relief is 15%. Already pays 6.5%, levy for him is around 9%. If he is trying to purchase addtional years or some other AVC scheme, he will be in breach of Revenue rules.

I don't think that's quite correct. The tax relief limits are on a scale that increases with age. The 15% bracket only applies to those under 30 years old with the scale increasing all the way to 40% for those nearing retirement.

Hawk Wing

Miss Minnie wrote: »

I'm hating this already, I think its going to widen the gap between public and private workers even further. Do people not realise that pay cuts of similar (actually more to be honest) are being handed out every day to us private workers? I earn 35k, so if I was public I would have a generous pension, safe job and a 6.4% paycut. However in reality I am facing a 10% paycut (and vulnerable job like all my colleagues) which is gross of 67euro a week yet I will be glad to take that rather than redundancy (which is a possibility too)

RTE news reported that over 90% of Dublin companies are passing paycuts of up to 10% to staff.

Don't get me wrong, I do feel sorry for everybody whos belts are going to be tighter after this, I will be the same myself very soon. But its just very hard to hear union leaders saying that hard working public staff don't deserve this, I work hard too! But it just seems to be the way Ireland is heading

The public sector make me sick, totally detached from reality, I'm on a three day week since last June, losing nearly 300 euro a week, no work for the last month, and they still crib when asked to pitch in like everyone else.

epictetus2009

Stargal wrote: »

My boyfriend will be getting a cut of over €2,500. As SIPTU have said, this is a pay cut being dressed up as a pension levy. Joke of a way to try to solve the problem.

Wont be able to sqander it then on stuff you dont need..like LV bags and holidays in spain.

Civil servants departments and politicians who have no related skill set to their brief are the problem. Jog on whining on here about your bf. Is he a dell employee..no is he a waterford crystal employee.. no is he an ericson employee no.

''make everything complex'' so we appear like we are cutting edge is the brief of any good civil servant. The civil servants who actually make decisions have spewed and ballsed up the cut of quangoes which fk us over to the tune of a few billion.

if they lived by the private sector rules they be redundant years ago mate. Im talking about those in admin specifically caging in their own department. I am not talking about gardai, nurses etc. I challenge any civil servant to come on boards and represent their mundane meaningless position.

nesf

Godge wrote: »

Lenihan has already said that levy will be treated the same as private sector tax relief.

It was more ambiguous than that. From: http://www.irishtimes.com/newspaper/frontpage/2009/0205/1233787117549.html

“Public servants paying the new pension contribution will be treated for tax purposes in the same way as those making pension contributions in the private sector.

“Contributions will be deducted from gross pay by employers before income tax, PRSI and health levies are calculated and, as such, pension contributions will be effectively relieved of tax at the marginal rate.”

There is no implication of a ceiling here as you would have with private schemes. It sounds just like a straight tax saving because of it coming out before tax is calculated (which is different to the private sector tax relief).

Arathorn

I've yet to see someone from the public sector say this is the right thing to do, or see someone from the private sector say this is an unfair move.

Just goes to show people are selfish and look after their own interests. We need people to look after the interests of the country as a whole. Since the country DOES NOT HAVE THE MONEY and the hundreds of THOUSANDS having to survive on 200 dole per week i'm gonna have to side with the private sector.

I work in the private sector, I guess im selfish too

epictetus2009

well its at least your taking a side - public sector camp are still oblivious. This is the new political civil war.

Anyone that goes to australia to allow things to ''blow over'' are treacherous dogs.

What will happen as a result of this purge is that a) entreprenialism will flourish again b) no more fattness drunk on credit ... and we all did!

and maybe an oige hosteling wtih kick off again..

Test For Echo

Havn't had time to assess how this will impact me. Had been saving up for a deposit for a house with the gf of 6 years but it looks like that relationship is ending. Just as I need to save harder, BANG, along comes a levy. Can't afford a place on my own. Just don't care about it at the moment though...

leeroybrown

Arathorn wrote: »

I've yet to see someone from the public sector say this is the right thing to do, or see someone from the private sector say this is an unfair move.

You've got one. I'm currently public sector (an research employee in the education sector on a fixed term contract) and I think it had to be done. I pay into a public sector pension but doubt I'll be in the public sector long enough to derive any real benefit from it. My big problem is that this does nothing to address public sector inefficiencies.