Public service pension levy announced

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Originally Posted by Macy

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.

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1) Voluntary redundancies cost a huge amount of money in the short-term and generally attract a lot of people you want to keep. It leaves the poor performer issue unaddressed (the private sector will fire many of these people in a downturn).

2) Its not collective bargaining if there is no common ground on the key issues. On the levy, the only common ground appears to be flat out rejection.

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Originally Posted by dahamsta

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 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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But who are the "top earners"? Who are "they" and "these people"?
To someone on minimum wage a civil servant on 40-50k would qualify as a top earner. Maybe then they stop claiming medical expense relief?
To that civil servant it will be someone earning 80-100k. They should stop claiming it so, right.
No, no the person on 80k will say I'm entitled to it but the bank CEO's shouldn't claim it. And on it goes.

The fact is if you are paying tax you can probably afford not to claim those reliefs but if the person on 50k doesn't think they should do that "for the good of the country" why should somebody on considerably more?

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Originally Posted by Macy

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.

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http://www.welfare.ie/EN/Publication...es/ClassA.aspx

Someone on A1 PRSI pays 2% over 52k with no upper limit, a reduced rate but not nothing.

Someone on class S1 (self employed/directors controlling companies) pay 5% up to 100k and 5.5% after that with no upper limit.

I don't think any one wants to go back to 70%+ top rate of tax from the 1980s. While the tax rates in Ireland could not be considered high the fact is you reach the top rate very quickly on modest income.

While it will look good politically to add new top rate for 100k+ people I don't think there are enough of them to add a significant amount to the tax take.

Avoiding tax is legal & everyone does it. Evasion is illegal.

paudie, your ideas of who a top earner is and how they behave is just not worth arguing with. You have perceptions I frankly have difficulty believing. I'll leave it there thanks.

I think there are 2 things at play here. Firstly as Fintan O Toole says the internal workings of the pension levy are unjust as in someone who is on 49,000 pays less then someone on 38,000 due to the levy being on the gross income. In addition there are other unjust examples. This in not unjust as in its unjust that someone is losing their job in the private sector but unjust that it can be fixed pretty easily if the senior civil servants and the minister actually made adjustments to the levy that made if fairer across the civil service. This really is an internal public service matter and the government and the social partners messed it up in my view.


Secondly and this continues on from my last point above. The government should have presented a package of reforms, in the banking sector,. the public sector and the taxation system and other areas. THis could have been presented as a road to recovery package or whatever. Anyway it would have been a genuine attempt get across the point that we are all in this together and that we all have a contribution to make. However what they have managed to do is a piecemeal attempt and they have turned public versus private and a culture of the politics of envy.

Very accurate assessment Neil (IMO).

It all smacks of panic thinking.

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Originally Posted by NeilMcD

I think there are 2 things at play here. Firstly as Fintan O Toole says the internal workings of the pension levy are unjust as in someone who is on 49,000 pays less then someone on 38,000 due to the levy being on the gross income. In addition there are other unjust examples. This in not unjust as in its unjust that someone is losing their job in the private sector but unjust that it can be fixed pretty easily if the senior civil servants and the minister actually made adjustments to the levy that made if fairer across the civil service. This really is an internal public service matter and the government and the social partners messed it up in my view.

Secondly and this continues on from my last point above. The government should have presented a package of reforms, in the banking sector,. the public sector and the taxation system and other areas. THis could have been presented as a road to recovery package or whatever. Anyway it would have been a genuine attempt get across the point that we are all in this together and that we all have a contribution to make. However what they have managed to do is a piecemeal attempt and they have turned public versus private and a culture of the politics of envy.

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Not keen on quoting an entire post but a very good assessment.

The fact is the government have no plan of recovery. They talk about the budget deficit all the time yet seem unwilling to actually take action as I think they want someone to take the fall. Ironically if they actually focused as hard on their budgets over the last 5 years the situation would not be so bad.

Got my first pay slip with a pension levy deduction today. It's not quite as bad as expected, we also got a handy email explaining how to calculate it (this pay date only takes in the first five days). Overall I think I'll lose about €50 a fortnight, money I'd prefer to have in my pocket, but not something worth bringing the country to a standstill for. I still think the weighting of the levy could be fairer and when tax increases hit after this emergency budget it'll still make for a fairly substantial decrease in disposable income (compensated for somewhat by lower mortgage and fuel costs). It's a difficult time for the country as a whole and unfortunately we don't seem to have a government with any kind of clue how to get it moving in the right direction again.

Private Sector pension numbers

For those lucky to have a pension.

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PENSION FUNDS continued to lose significant value last month, with the average Irish group managed fund shedding a further 5.7 per cent of its value.

The longer-term picture provides little comfort, with the average fund worth more than one-third less than in February 2008. Over the past three years, the average fund has weakened by 14 per cent each year.

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Any one in last 5 years before retirement is going to find it very difficult to make back those loses.

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Originally Posted by pete

Any one in last 5 years before retirement is going to find it very difficult to make back those loses.

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Normally funds are shifted to cash in the last 5 years before retirement.
Of more concern for retirees would be the present low interest rates at which they have to purchase an annuity

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Originally Posted by monutdfc

Normally funds are shifted to cash in the last 5 years before retirement. Of more concern for retirees would be the present low interest rates at which they have to purchase an annuity

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While I am sure a lot of money would have been in cash it would be unrealistic to have all money in cash for the last 3 years.

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Originally Posted by pete

While I am sure a lot of money would have been in cash it would be unrealistic to have all money in cash for the last 3 years.

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Typical mix say 20 years before retirement is 80% equity, 15% bonds and 5% cash (which may be contributions waiting to be invested rather than a strategic asset allocation.) As retirement approaches the fund is moved out of equities into bonds and cash. Obviously not a pile of cash gathering dust in the corner, but cash on deposit in an interest bearing account. Virtually no equities in the last 5 years I would say. (I'm not a pensions expert but I used to work in that area.)

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Originally Posted by OneRedArmy

1) Voluntary redundancies cost a huge amount of money in the short-term and generally attract a lot of people you want to keep. It leaves the poor performer issue unaddressed (the private sector will fire many of these people in a downturn).

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My understanding is that although it'd cost in the short term, redundancy and retirement payments are exempt from the Stability and Growth Pact calculations. So yes, the money would have to be found, but it wouldn't effect the 18.5bn deficit they've said to the ECB, and surely the Financial Markets would look beyond the short term cost towards the long term cost savings?

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Originally Posted by OneRedArmy

2) Its not collective bargaining if there is no common ground on the key issues. On the levy, the only common ground appears to be flat out rejection.

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I disagree, the common ground is that they want a fairer system as part of an overall plan. They all sit around the Congress table. The ones outright opposing it that I've heard are the cops, who aren't at the congress table anyway, and possibly the INO (but they were more concerned with overtime and allowance cuts)

Paudie - All I would be looking for is that all earners pay the same as a PAYE worker, both tax and PRSI. I repeat, I don't see what is so wrong with that? End all tax shelters, and actively pursue any new loopholes that are uncovered on an ongoing basis. Mind you, the Government clearly agree's with you, with the spin they've been coming out with, so I wouldn't panic if you or yours would be effected by actually asking those earning many multiples of the average industrial wage to pay a fair contribution.

I know it is not the responsibility of the Unions to come up with a pension levy scheme but given they are complaining so much should they not make an alternative suggestion?

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Originally Posted by pete

I know it is not the responsibility of the Unions to come up with a pension levy scheme but given they are complaining so much should they not make an alternative suggestion?

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AFAIK they have asked D/Finance for the relevant figures to make a detailed submission. Not sure if they have received them

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Originally Posted by Macy

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.

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It's a no brainer if their aim is to protect their own salaries. The claim being made here and in other media is that they're willing to take a bigger cut again in favour of lower paid workers. It's this contradiction between their words and actions which has my brain addled.

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Originally Posted by Bald Student

It's a no brainer if their aim is to protect their own salaries. The claim being made here and in other media is that they're willing to take a bigger cut again in favour of lower paid workers. It's this contradiction between their words and actions which has my brain addled.

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In fairness, its two seperate issues. The doctors haven't voted for any action on the pension levy so you can't say whether they're willing to accept it or not (the implication, if any, is that they're willing to accept it).

If they're being asked to work hours without pay (as the overtime ban would indicate) then thats a totally different story

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Originally Posted by Dodge

In fairness, its two seperate issues. The doctors haven't voted for any action on the pension levy so you can't say whether they're willing to accept it or not (the implication, if any, is that they're willing to accept it).

If they're being asked to work hours without pay (as the overtime ban would indicate) then thats a totally different story

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Possibly,
I don't think in terms much more complicated than more money or less money. In one hand, they want more money and in the other, less. Everything in between is pointless talking as far as I'm concerned.

Would the doctors be happier taking the same amount of cutback but with a different name attached to it?

Teachers next in line to approve industrial action. Statement implies this is a protest against the pension levy & government handling of the economy but it is obvious it has little to do with economy.

Being unhappy with the governments handling of the economy is not a reason to strike. That is why we have elections & local representatives.

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Originally Posted by Bald Student

Possibly,
I don't think in terms much more complicated than more money or less money. In one hand, they want more money and in the other, less. Everything in between is pointless talking as far as I'm concerned.

Would the doctors be happier taking the same amount of cutback but with a different name attached to it?

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The junior doctors issue goes back a lot longer. This would be happening whether there was a pension levy or not - it predates it.

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Originally Posted by pete

Teachers next in line to approve industrial action. Statement implies this is a protest against the pension levy & government handling of the economy but it is obvious it has little to do with economy.

Being unhappy with the governments handling of the economy is not a reason to strike. That is why we have elections & local representatives

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But the union side has constantly highlighted the need for an overall plan, Going back to the start of the sham talks at the end of January. Unless this is some kind of wind up to ignore the main thrust of the Union side of the debate?