Public pay cut ‘budgetary necessity’

PUBLIC sector workers will see their pay cut by between 5%-15% as a result of yesterday’s budget and that is on top of the average 7% lost through the pension levy introduced earlier in the year.

From January 1, there will be:

* A reduction of 5% on the first €30,000 of salary;

* A reduction of 7.5% on the next €40,000 of salary; and

* A reduction of 10% on the next €55,000 of salary.

Public service unions have previously said that two-thirds of their members earn €60,000 or less, meaning those workers can expect to lose between €1,500 and €3,750, according to their current salaries.

That covers workers earning €125,000 and under. The pay of those earning more than that will be reduced according to the findings of the Review Body on Higher Remuneration in the Public sector, the findings of which Finance Minister Brian Lenihan announced yesterday.

Under the review body’s recommendations, there will be an 8% pay cut for those earning €125,000 to €165,000, 12% for those earning €165,000 to €200,000, and 15% for those earning €200,000 or more.

“It must be acknowledged that public servants have already made a substantial contribution to the necessary reduction in public expenditure,” said Mr Lenihan, referring to the pension levy, the recruitment moratorium and the pay freezes in the sector.

“Unfortunately, more is required. The country can no longer afford a pay and pensions bill that accounts for more than a third of all current spending. Any reduction in the pay bill must be sustainable, must be applied in a progressive manner and must address the position beyond 2010.”

He said the reductions he was announcing, “do not reflect any lack of recognition of public servants or of the quality of the work they do for all of us.

“They are simply a matter of budgetary necessity in these extraordinarily difficult times,” Mr Lenihan said.

The only crumb of consolation for public servants was news that, in order to avoid a destabilising rate of retirement among older public servants, the pension entitlements of those retiring in 2010 will not be affected. It had been predicted that if the pension entitlement was taxed, many would have taken early retirement to protect their accrued lump sum.