Lenihan: Pension levy to be in place ‘for a long time’

PUBLIC sector workers were last night warned the tax on their pensions would be in place for a “long time to come” as Finance Minister Brian Lenihan pushed the move through the Dáil.

As angry demonstrators protested against the levy outside Leinster House, the minister hinted at only minor changes to the effective pay cut.

He insisted the levy would pull in e1.4 billion this year and though it may be revised when the economy finally picks up, it would “be part of the landscape for a long time to come”.

Fine Gael deputy spokesman on finance Kieran O’Donnell TD said the levy was unfair and would fall well short of its target and only bring in e800 million a year.

Mr Lenihan rejected the claim, insisting he had no other option to achieve the bulk of the emergency e2bn in cuts needed to control the budget deficit.

“The levy is not unfair. We have taken a graduated approach to ameliorate the burden on the lower paid,” Mr Lenihan said.

However, he indicated the levy could be revised. “I would not rule out consideration of other banding options. But the savings must be equivalent and that is fundamental,” he said.

The Financial Emergency Measures in the Public Interest Bill 2009 was piloted through the Dáil as 4,000 public servants attended a rally outside Leinster House to protest against the levy.

Under the bill, public servants earning over e20,000 will pay a 10% levy on their salaries, while those earning less will be liable to pay the levy at a reduced rate.

Anyone earning up to e15,000 will pay a rate of 3%, while those earning between e15,000 and e20,000 will pay 6%.

The bill also contains changes in the early childcare supplement and the farm waste management scheme, both announced at the same time as the levy.

The levy will apply to TDs, MEPs and senators, but due to the provisions of the Constitution, the President and the judiciary cannot be included.

The levy will apply to all earnings, including allowances and overtime from the beginning of next month.

The Civil, Public and Services Union (CPSU), which represents about 13,000 lower paid staff, organised the Dáil protest.

“We will play our part but lower paid civil servants are not prepared to be targeted by this Government for savage pay cuts,” CPSU general secretary Blair Horan said.

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