Information Circular 1/2009 – Imposition of Pension Levy on Public Service Workers

By PDFORRA

To all PDFORRA members:

PDFORRA is bitterly disappointed that members of the Defence Forces in tandem with other Public Sector workers must now carry the burden from mistakes made by others in the management of our economy. The fact that members of the Defence Forces must now pay a significant pension levy is an unjust and inequitable attempt at a solution. It is unjust to try to find a solution to the present economic crisis by targeting Public Service workers. Clearly, this burden should be shared more widely. In this regard additional revenues should be raised by means of further taxation across the economy rather than through a pension levy which is confined to Public Service workers.

Members will be aware that negotiations broke down on the morning of Tuesday, 3 February 2009 and that the Government decided to act unilaterally. The Government decided to reduce Public Service pay costs in 2009 as follows:
(a) Non-payment of the pay increases scheduled under Towards 2016, Module II in 2009 and 2010;
(b) An increased pension levy on all pay of 3% on the first €15,000 of earnings, 6% on the next €5,000 and 10% on the balance (including line pay, allowances, MSA, technician pay etc).
(c) A 25% reduction in Domestic Travel and Subsistence rates.

The following Table based on information currently available sets out the effect of the increased contributions on various earnings levels, along with the net effect after allowing for Tax Relief on same. The Tax Relief varies depending on the Tax Rate Paid – either 20% or 41%.

Earnings

Gross
Contribution

%
Contribution

Tax
Rate

Net
Contribution

Tax
Rate

Net
Contribution

€15,000

€450

3.00%

20%

€360

41%

€266

€20,000

€750

3.80%

20%

€600

41%

€443

€25,000

€1,250

5.00%

20%

€1,000

41%

€738

€30,000

€1,750

5.80%

20%

€1,400

41%

€1,033

€35,000

€2,250

6.40%

20%

€1,800

41%

€1,328

€40,000

€2,750

6.90%

20%

€2,200

41%

€1,623

€45,000

€3,250

7.20%

20%

€2,600

41%

€1,918

€50,000

€3,750

7.50%

20%

€3,000

41%

€2,213

€55,000

€4,250

7.70%

20%

€3,400

41%

€2,508

€60,000

€4,750

7.90%

20%

€3,800

41%

€2,803

€65,000

€5,250

8.10%

20%

€4,200

41%

€3,098

€70,000

€5,750

8.20%

20%

€4,600

41%

€3,393

€75,000

€6,250

8.30%

20%

€5,000

41%

€3,688

€80,000

€6,750

8.40%

20%

€5,400

41%

€3,983

€85,000

€7,250

8.50%

20%

€5,800

41%

€4,278

€90,000

€7,750

8.60%

20%

€6,200

41%

€4,573

€95,000

€8,250

8.70%

20%

€6,600

41%

€4,868

€100,000

€8,750

8.80%

20%

€7,000

41%

€5,163

€125,000

€11,250

9.00%

20%

€9,000

41%

€6,638

€150,000

€13,750

9.20%

20%

€11,000

41%

€8,113

€175,000

€16,250

9.30%

20%

€13,000

41%

€9,588

€200,000

€18,750

9.40%

20%

€15,000

41%

€11,063

€225,000

€21,250

9.40%

20%

€17,000

41%

€12,538

€250,000

€23,750

9.50%

20%

€19,000

41%

€14,013

€275,000

€26,250

9.50%

20%

€21,000

41%

€15,488

€300,000

€28,750

9.60%

20%

€23,000

41%

€16,963

 

The PDFORRA National Executive will be meeting to consider its options in relation to this unjust and unilateral Government decision. PDFORRA will operate in tandem with the other Public Service unions’ to address this matter. Further information will be issued as it becomes available.

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