View Full Version : Public service pension levy announced
The €1.4 billion was all cutbacks, but focussed on higher earners. The increased taxes would've doubley (should be a word) effected highly paid public servants and apparently all public service unions had agreed to it
But that would be a 1.4 tax increase for public & private. Given maybe 20% of workers are public thats not much of a cut for the public sector.
Dodge
11/02/2009, 12:37 PM
But that would be a 1.4 tax increase for public & private. Given maybe 20% of workers are public thats not much of a cut for the public sector.
You didn't really read the full post, did you pete
€1.4 billion was to be saved solely from the public service bill (as now, but with the distribution being fairer)
passinginterest
11/02/2009, 1:06 PM
You didn't really read the full post, did you pete
€1.4 billion was to be saved solely from the public service bill (as now, but with the distribution being fairer)
The levy has to be adjusted to iron out anomalies that mean a worker earning 39,000 ends up paying more than someone on 48,000 due to increased tax relief for the person in the higher band. That's just plain ridiculous, it should definitely be weighted more towards the higher earners.
OneRedArmy
25/02/2009, 12:17 PM
ICTU repeatedly refer to their 10 point plan as something the Government should focus on. I just read it.
It's the most aspirational, pie-in-the-sky work of fiction I've ever read. It also has no numbers in it. By all means advance a Social Solidarity Pact, but you can't ignore the financial gap or address it with glib generalizations like "people should contribute in line with their ability to do so".
The fact remains that the public sector needs to reduce it's staff costs. If laying people off is verboten, then reducing per employee cost in the only alternative. Whilst expecting the senior execs to bear the brunt of this might be equitable, the numbers rarely add up due to the public services organizational structure.
The basis of that plan worked for Sweden. And they are saying that should be the basis of discussions not that it's the finished artical. Maybe we should use the Government and IBEC plans as starting points? :rolleyes:
7.5% average, with a top rate of only 9% shows there is some room for movement on making the pension levy much more equitable.
First imapct of yesterdays strike (http://www.irishtimes.com/newspaper/breaking/2009/0227/breaking55.htm)
The Department of Social and Family Affairs has today warned that some benefit payments will be issued later than normal next week due to the one-day strike which took place yesterday.
Members of the Civil, Public and Services Union (CPSU) were involved in industrial action against the pensions levy yesterday, leading to the closure of social welfare offices around the State.
Due to the strike, 4.500 customers, who would normally get their illness benefit or occupational injury benefit payment this Monday will not receive it until the following day.
OneRedArmy
27/02/2009, 5:42 PM
God help civil servants if the IMF come in. Pensions levies will be the least of their worries. If anyone wants to see the nightmare scenario, look into the austerity packages the IMF implement as payback for a bailout. Everything gets cut, except of course taxes.
Sorry for my ignorance but what is IMF?
INTO are balloting for strike action this week. I think the proposed dates are the 29th/30th of March
Poor Student
27/02/2009, 6:33 PM
The International Monetary Fund. They're like a global lender of last resort for countries. In simple terms, if you need their help they'll be telling you how to run things.
The International Monetary Fund. They're like a global lender of last resort for countries. In simple terms, if you need their help they'll be telling you how to run things.
Ok. Thanks.
Bald Student
27/02/2009, 11:59 PM
INTO are balloting for strike action this week. I think the proposed dates are the 29th/30th of MarchThe argument was made to me earlier in this discussion that workers on above average wages were willing to take bigger cuts to protect their less well paid colleagues. Does this nursing ballot and a similar one by the doctors show that to be false?
The International Monetary Fund. They're like a global lender of last resort for countries. In simple terms, if you need their help they'll be telling you how to run things.
Only basket case countries got to the IMF. I read one article that suggested the IMF would look for at least 30% cut in public sector wages - I would doubt they would care about whether that implemented by pension levies, pay cuts or cuts in numbers.
OneRedArmy
28/02/2009, 12:35 AM
Only basket case countries got to the IMF. I read one article that suggested the IMF would look for at least 30% cut in public sector wages - I would doubt they would care about whether that implemented by pension levies, pay cuts or cuts in numbers.Spot on Pete. Argentina is a good example. Cuts in wages as you described, plus 20% redundancy in the public sector IIRC.
Spot on Pete. Argentina is a good example. Cuts in wages as you described, plus 20% redundancy in the public sector IIRC.
Probably increased taxes too, something this bumbling Government won't make a decision on without the Taxation Commission (made up of vested interests) to hide behind. There's two sides to this, but the Government is successfully making it about public sector pay, as to talk about taxes is to admit their own mistakes in making the public finances too reliant on consumption taxes.
OneRedArmy
02/03/2009, 10:43 AM
No doubt taxes need to go up in addition to cut-backs. It's ridiculous really as whilst a tax rise will never be popular, it's not like it will be an unexpected surprise.
But the FF Ard Fheis reinforced what a bunch of spineless backslappers they are.
If you look at the taxation commission membership, there is not a hope it will come out with a progressive taxation system. Too many banker, stockbrokers and accountants plus IBEC - the very section of society that lead us into this mess. It'll be regressive taxes, with lots of avoidance measures to keep them in work. More fool Hayes and the farmers for agreeing to have anything to do with it. It's the perfect Quango for Lenihan and Cowen to hide behind, whilst being sure not to upset their paymasters.
micls
02/03/2009, 11:10 AM
The argument was made to me earlier in this discussion that workers on above average wages were willing to take bigger cuts to protect their less well paid colleagues. Does this nursing ballot and a similar one by the doctors show that to be false?
The INTO is the teachers organisation not the nurses.
Personally I am willing to take the hit but I think it's structured awfully. Those on higher wages should be paying more and those on lower wages should simply have a pay freeze.
As it stands the pension levy proposal is badly thought out and laid out.
Im repeating myself now but I also have a problem with the large amount of temporary teachers(also into members) taking the same cut as permanent teachers.
Dunno about nurses but is the doctor one not the junior doctors? Who are now being asked to work the same overtime but not get paid for it?I cant see anyone standing for that if true. Im far from certain on that though just hearing snippets from different people
OneRedArmy
02/03/2009, 11:17 AM
All this talk of the super-wealthy bearing the burden of any tax increase is wishful thinking.
There simply isn't enough suitably high earners to make a difference to the overall tax revenue. You'd have to put the marginal rate close to 100% which would probably push them out of the country.
It's may not be morally right, but it's the reality. Maximum tax benefit is gained through taxing the average earner.
It'd be progress if they just paid any of the bloody burden.
Tax exiles should have to pay a minimum contribution to keep their citizenship, and/or the time in the country before tax is due should be severely reduced.
Im repeating myself now but I also have a problem with the large amount of temporary teachers(also into members) taking the same cut as permanent teachers.
Maybe teachers are different, but in the wider public sector they're not entitled to pension, but are expected to pay for it. Overtime and Allowances are not pensionable, but they count towards the levy too.
Im repeating myself now but I also have a problem with the large amount of temporary teachers(also into members) taking the same cut as permanent teachers.
I know its a complicated system wheich I have little hope of understanding but surely some of those temp teachers are filling for for others on career breaks? I believe the limit is currently 5 years which seems far too long. I believe Michael Martin was or is on a "career break" from his teaching position which is a just an abuse of the system.
I know tax increases are on the way primarily on PAYE rates but I can't see how the public service numbers can be maintained in the coming years as tax increases required would be too much. Even if Labour are in government they will realise that a pay cut or cut in numnbers will be required next year.
micls
02/03/2009, 12:28 PM
I know its a complicated system wheich I have little hope of understanding but surely some of those temp teachers are filling for for others on career breaks? I believe the limit is currently 5 years which seems far too long. I believe Michael Martin was or is on a "career break" from his teaching position which is a just an abuse of the system.
Some yes. There are many reasons for being temporary.
You are entitled to 5 years career break over the course of your career.It can be used all together or separately
Lionel Ritchie
02/03/2009, 12:45 PM
No doubt taxes need to go up in addition to cut-backs. It's ridiculous really as whilst a tax rise will never be popular, it's not like it will be an unexpected surprise.
But the FF Ard Fheis reinforced what a bunch of spineless backslappers they are. ...and their support too. RTE interviewed an amount of them over the weekend and found exactly one who didn't come across as a certifiable moron. He at least admitted he was only there for the crack in evenings.
One woman, perhaps giving a sneaky peak into her own world, opined that Enda Kenny couldn't run a dog fight.
Dodge
02/03/2009, 12:57 PM
Martin is on "parliamentary leave". Up until last month a number of TDs were still claiming some sort of allowance. I'll try and google it (it was in the Indo)
Noel Dempsey resigned lat month too
I know tax increases are on the way primarily on PAYE rates but I can't see how the public service numbers can be maintained in the coming years as tax increases required would be too much. Even if Labour are in government they will realise that a pay cut or cut in numnbers will be required next year.
PAYE changes would effect the public sector as well, so on top of the levy they'll be paying a relatively big contribution as well as the inevitable productivity that recruitment embargo's mean.
At least with Labour there would be a plan, and some semblance of it being fair. I've said it before, the main problem with the Levy is the weighting, an average of 7.5% whilst those on the highest rates pay an average of 9.2% is a nonsense - they're the people who benefit most from the pension and earn the most to be able to afford it. The pension is based on the standard state contributory pension that everyone can get, plus an extra amount* - the higher up the scales, the bigger the extra amount.
*another of the great Public Sector Pension myths - when they talk of the actuarial cost, they don't take into account the state contributory pension that makes up part of the final pension.
NeilMcD
02/03/2009, 1:54 PM
Well said Macy.
dahamsta
02/03/2009, 1:57 PM
Tax exiles should have to pay a minimum contribution to keep their citizenship, and/or the time in the country before tax is due should be severely reduced.Amen to that. Failing that, they shouldn't be allowed into the country. We'd be a lot better off without the likes of Tony O'Reilly anyway.
I've said it before, the main problem with the Levy is the weighting, an average of 7.5% whilst those on the highest rates pay an average of 9.2% is a nonsense - they're the people who benefit most from the pension and earn the most to be able to afford it. The pension is based on the standard state contributory pension that everyone can get, plus an extra amount* - the higher up the scales, the bigger the extra amount.
That is a very naive view. If you don't pay people like the Financial Regulator enough you won't get the best. Oh wait..... :o
That is a very naive view. If you don't pay people like the Financial Regulator enough you won't get the best. Oh wait..... :o
And we've the best politicians money can buy...
Bald Student
02/03/2009, 3:13 PM
The INTO is the teachers organisation not the nurses.
Personally I am willing to take the hit but I think it's structured awfully. Those on higher wages should be paying more and those on lower wages should simply have a pay freeze.Sorry about mixing up the teachers and nurses, the acronyms are similar. I think my point is stands though.
I agree with you and the others saying that the higher paid should take more of the burden but as it is groups like the teachers and junior doctors, both of whom are on well above the average wage, are threatening strike over the current amount. I don't see them volunteering for an even bigger cut, as was claimed above.
And we've the best politicians money can buy...
Yup. Other countries are jealous when they see them at EU meetings.
e3vEOSkk5AM
I don't see them volunteering for an even bigger cut, as was claimed above.
I think it was decided at ICTU level that if all "social partners" could come to agreement, then all unions would support it, even it saw their members take some cut. I still think that applies but individual unions are now all threatening strike action to force the Govt back to negotiating table. As far as I'm aware Nurses, Teachers and junior Doctors etc would be striking with the ICTU, rather than on their own to "show strength" rather than to fight their cause.
At least that’s my reading of it. It could well be that some of the unions at the higher end of public service wage want to fight their corner too.
Bald Student
02/03/2009, 3:43 PM
I think it was decided at ICTU level that if all "social partners" could come to agreement, then all unions would support it, even it saw their members take some cut. I still think that applies but individual unions are now all threatening strike action to force the Govt back to negotiating table. As far as I'm aware Nurses, Teachers and junior Doctors etc would be striking with the ICTU, rather than on their own to "show strength" rather than to fight their cause.
At least that’s my reading of it. It could well be that some of the unions at the higher end of public service wage want to fight their corner too.
I don't mean to be overly cynical but that sounds like a lot of talk around the issue. I'll believe you if I see posters at the strikes saying "I'm striking in favour of a bigger pay cut for myself.", but at the moment that sounds like people talking out of both sides of their mouth.
I don't mean to be overly cynical but that sounds like a lot of talk around the issue. I'll believe you if I see posters at the strikes saying "I'm striking in favour of a bigger pay cut for myself.", but at the moment that sounds like people talking out of both sides of their mouth.
In fairness I don't think I could ever accuse somebody of being overly cynical, but in fairness these "social partnership" jobbies are full of people talking out of the side of their mouth. Its as much about who appears to have done what than it is what anybody actually did.
And as I said above, its only my reading of it. It wouldn't surprise me in the least if more of the ICTU unions break ranks, and go the route the CPSU took.
Bald Student
02/03/2009, 4:03 PM
In fairness I don't think I could ever accuse somebody of being overly cynical, but in fairness these "social partnership" jobbies are full of people talking out of the side of their mouth. Its as much about who appears to have done what than it is what anybody actually did.
And as I said above, its only my reading of it. It wouldn't surprise me in the least if more of the ICTU unions break ranks, and go the route the CPSU took.
Fair enough,
The reason I raised it in the first place is because it didn't ring true to me. I'd imagine that the government would have jumped on any offer from the union leadership to suggest a pay cut of this size to their own members. I can't imagine that the government brought all this trouble on itself be making cost neutral adjustments to something the unions were willing to accept.
I think it's much more likely that there was no deal on the table a few months ago so the government went at it alone. The unions then, knowing that they wouldn't get away with attacking it directly, are fighting around the edges of it to try to talk the government back in to the secret meetings.
I also think that's the reason we have a pension levy instead of a straight pay cut. The pay cut couldn't be implemented without the workers' consent.
OneRedArmy
02/03/2009, 4:15 PM
For evidence of "talking out if both sides of mouth" see the ICTU 10 point plan. Gives no indication of concrete concessions, yet is always referred to when they are pushed on alternatives to levy/wage cuts/tax rises.
Sorry about mixing up the teachers and nurses, the acronyms are similar. I think my point is stands though.
I agree with you and the others saying that the higher paid should take more of the burden but as it is groups like the teachers and junior doctors, both of whom are on well above the average wage, are threatening strike over the current amount. I don't see them volunteering for an even bigger cut, as was claimed above.
Within teaching itself there are a vast range of earnings.
The INTO is looking for what they call a 'fairer way' which they outlined and sent to the government.
This plan saved the same amount of money as the governments one but the emphasis was again on the higher paid within teaching. It also involved things like cutting down on sick days and other stuff.
I am a permanent teacher. I am happy to take my share of the burden. However I dont think I should be paying roughly the same percentage as someone 20points or more up the scale from me. Likewise I dont think public sector workers lower down on the scale should be paying as much as I am(or in many cases anything at all).
Similarly I think the levy should only apply to permanent staff as it is our job security that we are being asked to pay for, which is fair enough.
The national strike thing is basically saying(imo) that everyone is unhappy with the current arrangement and there is a better way to do it. Most agree the way to do this is by weighting the levy more towards those who can afford it.
To clarify, I am not in favour of striking, but I can understand the reasoning
Billsthoughts
02/03/2009, 9:25 PM
Am in two minds over this as you get fed so much mis information from people with vested interests. On the one hand I hate when all the countries problems are put at the door of one particular group. Like the public sector are responsible for all of our ills. On the other hand I know people working 12 hour days and weekends all year who didnt get any pay rise or bonus cause of the general economic climate. we dont get paid overtime after a certain level but your expected to work it all the same in order to get ahead. How do you muster up sympathy for marching civil servants when you hear stories of the ridiculous amounts of overtime pay earned by the guards at the shell to sea protests for example. some reform of the public sector with a strong emphasis on value for money would have served the country better in the long run.
we dont get paid overtime after a certain level but your expected to work it all the same in order to get ahead. How do you muster up sympathy for marching civil servants when you hear stories of the ridiculous amounts of overtime pay earned by the guards at the shell to sea protests for example
At a certain level (and not that high a level either - AP level for those who know anything about it) civil servants don't get paid overtime either.
What annoys me about public sevants is the "guaranteed overtime" that some are on. Thats a sham...
(Oh and I wasn't having a go billsthougts, its an easy mistake to make...)
What annoys me about public sevants is the "guaranteed overtime" that some are on. Thats a sham...
True. Pay should not be supplemented by regular overtime. If you need people to work overtime every week then employee more staff.
I don't understand the different pay grades or differences between sector of the public sector so its all the same to me as I they are part of the same union & protest/strike together. I would guess I am not alone...
Dodge
02/03/2009, 11:31 PM
I don't understand the different pay grades or differences between sector of the public sector so its all the same to me as I they are part of the same union & protest/strike together. I would guess I am not alone...
That's way off even within the civil service there's 3 different unions for the first 5 grades. And only one o them was on strike last week
Public service represented by dozens of unions
paudie
03/03/2009, 8:05 AM
It'd be progress if they just paid any of the bloody burden.Tax exiles should have to pay a minimum contribution to keep their citizenship, and/or the time in the country before tax is due should be severely reduced.
According to the Tribune the top 2.5% of tax payers pay a third of all Income tax. People earning over 100,000euro pay over half the income tax.
40% of all income earners pay no tax at all.
The popularly held belief that only the "fat cats" have gained from the Celtic Tiger is simply not true. We all have and we will all have to contribute to the recovery by paying more tax
According to the Tribune the top 2.5% of tax payers pay a third of all Income tax. People earning over 100,000euro pay over half the income tax.
At what rate though? Just because they pay, doesn't mean they pay enough.
True. Pay should not be supplemented by regular overtime. If you need people to work overtime every week then employee more staff.
In my employment, there's no overtime any higher than clerical officer (the lowest office based grade). The Union has been trying to get the General Assistants wages increased rather than overtime, as even though it brings up their take home pay, it isn't pensionable.
I don't understand the different pay grades or differences between sector of the public sector so its all the same to me as I they are part of the same union & protest/strike together. I would guess I am not alone...
CPSU, PSEU and AHCPS are civil service unions, some of them in the public sector. CPSU is for clerical staff. PSEU is staff above that but below management. AHCPS is for management grades. IMPACT is mainly specialist and technical staff. SIPTU aren't recognised for the Civil Service and are a general trade union, with 2/3 of it's membership in the Private Sector. Then the specialist professions like teachers and doctors have their own unions.
A few other points...
The junior doctor's have balloted over their overtime being cut, whilst being expected to do the same work. Surely that's a no brainer for anyone.
The ICTU plan is the only plan on the table, as lacking in detail as it is, and ICTU are only saying using it as the starting point of an agreement, not as the finished article. Using Sweden as a model is hardly that outlandish is it?
Unions will only do what the members decide. The leadership can only ask for a mandate. In fact on the pension levy's, it's largely been members demanding action whilst the leaderships go for a more softly approach. For the first time in a while, congress is having to react to the members rather than the other way round.
NeilMcD
03/03/2009, 9:11 AM
Check out Fintan O Tooles article in todays times.
http://www.irishtimes.com/newspaper/opinion/2009/0303/1224242144730.html
The key point is that the internal workings of the levy are unjust. This debate has to be taken away from public and private and more to lower versus higher paid.
dahamsta
03/03/2009, 9:23 AM
40% of all income earners pay no tax at all.Including some of the top earners.
http://www.rte.ie/news/2007/0924/revenue.html
(2007 article on 2004 figures, but it still happens, in fact if anything it got worse in the last few years.)
adam
OneRedArmy
03/03/2009, 11:53 AM
Check out Fintan O Tooles article in todays times.
http://www.irishtimes.com/newspaper/opinion/2009/0303/1224242144730.html
The key point is that the internal workings of the levy are unjust. This debate has to be taken away from public and private and more to lower versus higher paid.There's a lot going on to workers in every sector that's unjust.
Given the vested interest of each individual union (as Macy illustrates above) and the unwillingness to consider layoffs at any level, it's hard to see how it will change.
ICTU are toothless and can't take sides.
I can see this leading to union membership amongst the public sector dropping significantly.
I can see this leading to union membership amongst the public sector dropping significantly.
I'm a shop steward, and the opposite is the case - I've been getting more and more requests as the days go on. In times of uncertainty people go to their Trade Union rather than turn their back on it, as it is their only protection to be part of a collective rather than an individual.
The Unions I mentioned have more in common than would divide them - virtually all PSEU and AHCPS members would've been in the CPSU, and on promotion CPSU encourages people into the PSEU. Similarly IMPACT and SIPTU would generally cooperate well. It's the whole bloody point of Congress ffs!
btw Redundancies would be resisted, but there's more than one way for the Government to skin a cat. A voluntary early retirement scheme would get volunteers even if opposed by the unions (and I'm not sure it would be). In fact I think it's one of the things the Bus Unions are proposing rather than the shameful sackings of people on their probation (who've done nothing wrong) that CIE are doing.
paudie
03/03/2009, 2:11 PM
Including some of the top earners.
http://www.rte.ie/news/2007/0924/revenue.html
(2007 article on 2004 figures, but it still happens, in fact if anything it got worse in the last few years.)
adam
True enough. Obviously however not every high earner pays no tax if 2.5% of tax payer pay 40% of the total
At what rate though? Just because they pay, doesn't mean they pay enough.
At 41% tax plus 5.5% PRSI probably. Whether that is "enough" is another question obviously. There's little doubt that the top rate will increase a lot and there may be a third higher rate introduced.
Do all the 40% of income earners who pay no tax pay "enough" tax? Do people accept that a lot of these people will have to brought into the tax net?
What annoys me about debates on this subject is that it amounts to little more than finger pointing.
People say they something has to be done to tax the "well off" but they sing a different tune when it looks like it will affect them personally.
Arguably it's the middle income earner who has gained most from the low direct tax regime and will probalby complain the loudest when it is taken away.
I simply want all earners to pay the same rates of tax as PAYE workers. At the moment, many avoid this and regardless of the overall figure that they and the Government hide behind, they pay at a lower rate than the ordinary joe soap worker. I don't think it's finger pointing or that unreasonable to expect all people earning to pay at the same rates and not avoid tax is it?
Middle income earners always would've done better out of widening the standard band rather than reductions in the top rate of tax. Any knock on now from changes in the tax rates will impact on the middle income earners, but only because of the bias of the FF led Governments over the last few years that have favoured tax reductions for high earners at the expense of the rest
And just for the record, you only pay PRSI up to 50k odd, so you can discount that out of you the rich pay their fair share calculation.
paudie
03/03/2009, 3:19 PM
I simply want all earners to pay the same rates of tax as PAYE workers. At the moment, many avoid this and regardless of the overall figure that they and the Government hide behind, they pay at a lower rate than the ordinary joe soap worker. I don't think it's finger pointing or that unreasonable to expect all people earning to pay at the same rates and not avoid tax is it?
.
But everybody avoids tax, not just top earners. Do you claim medical expense relief, service charges relief, mortgage interest relief? If you do you avoid tax. And so you should!
If for some reason your salary increased would you stop claiming the reliefs you are entitled to? If you would you're a lot more generous than I would be. It's easy to say that everybody should pay the same rate but how do you actually go about doing that.
Of course the CEO's of all the major banks are PAYE workers as well:)
dahamsta
03/03/2009, 3:33 PM
But everybody avoids tax, not just top earners. Do you claim medical expense relief, service charges relief, mortgage interest relief? If you do you avoid tax. And so you should!I can see how you could call that tax avoidance in the strictest sense of the word. But I wouldn't, and I'd guess 90% of Ireland wouldn't.
If for some reason your salary increased would you stop claiming the reliefs you are entitled to?If I was earning what the top earners are making, yes, I would. I would also keep my money in Ireland and pay the full amount of tax due on it. If I didn't, I'd feel like a scumbag taking advantage of my country.
That's how I think of these people, they're scumbags. I'd prefer they didn't pay any tax in my country, and weren't allowed to call themselves Irish. Because the morals by which they live can't be good for our country anyway.
adam
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