The introduction of a levy on the pensions of civil and public servants is a serious hit to take home pay.
Hundreds of thousands of public sector workers including teachers, nurses, Gardí and civil servants, are facing major reductions in their take home pay as a result of the governments €2 billion recovery plan for the economy.
After failing to secure an agreement with the social partners on the plan, the government went it alone with a number of cost saving measures. The public service pay bill is to be cut by €1.4 billion. This will be achieved by making all public servants contribute towards their pensions in the form of a pension levy.
What exactly does the new pension levy mean for public servants individually? David Murphy provides a few examples of how the new levy will impact on take-home pay.
- A single teacher earning €32,000 will lose €1,456*.
- A married Garda, the only earner in a family earning €49,000 will lose €2,000*.
- A married civil servant, the only earner in a family earning €70,000 will lose €3,239*.
(* after tax)
Many civil and public servants will be absolutely gobsmacked at the new rates they are now going to have to pay.
The government defends the introduction of the levy saying that civil and public servants have guaranteed pensions while private sector pensions have taken a hammering.
An RTÉ News report broadcast on 3 February 2009. The reporter is David Murphy.
