Senior public servants earning more than €150k to receive 10% to 15% pay restoration

The pay restoration is the last round of the unwinding of pay cuts imposed on public servants during the financial crisis

Minister for Public Expendenture and Reform, Michael McGrath. Picture: Sasko Lazarov/RollingNews.ie

The country’s highest paid public servants are to have their pay rates restored after they were cut during the financial crisis more than a decade ago.

The pay restoration due to start from next week is the last round of the unwinding of pay cuts imposed on public servants during the financial crisis.

It will involve pay rises of between 10% and 15% for judges, hospital consultants and many senior officials from July 1.

Minister for Public Expenditure and Reform Michael McGrath is due to make a decision in the coming days on the restoration.

Salaries up to €150,000, which account for 99% of the public service, have been fully restored.

"It is expected that the minister will make a decision on this issue later this week or early next week," a spokesperson for the Department of Public Expenditure and Reform said.

"The minister is currently examining potential options around how and when this final element of FEMPI restoration will be implemented," the spokesperson added.

Public pay offer was 'fair'

Earlier, Minister McGrath said the Government’s public pay offer was “fair” as he hopes talks on a new deal will resume.

Talks on a new public sector pay deal ended on Friday without agreement. The Department of Public Expenditure had offered supplementary pay rises of just 2.5% for the period 2021-2022, despite expected annual inflation of at least 9% over the two-year period, the union negotiators claimed.

Michael McGrath sought to clarify that “that particular offer” was in addition to the commitments made under Building Momentum, a previous pay deal, which already provides for a 2% increase across this year.

“It was 1% in February, and there's a second 1% in October. So in effect, the proposal that was made by the government side would have brought the overall increase to 7% across this year and next year, ” McGrath said.

“That is against a forecast inflation rate across the two years of over 9%. So it would have went about three quarters of the way there in respect of inflation and we have always made the point that pay alone cannot be expected to fully offset the impact of inflation.” 

Mr McGrath said the other measures that the Government has introduced to date must be taken into account and has committed to doing more in the autumn in October's budget.

“We think that it was a very good offer, and that it was a fair offer and also that it would have brought some extra benefits for lower-paid public sector workers with a level of benefit higher than the figures that we have spoken about.

“The WRC asked both sides to reflect on the discussions that took place last Thursday and into the early hours of Friday. The backdrop here, we acknowledge, is incredibly difficult.

“We did have an opportunity yesterday - very informally - to meet some of the key players from a trade union side so it was good to have that opportunity - just to have some face time and have a quick chat. We will reflect on all that has been said and I do hope in the coming days that it will be possible to get back into discussions. I think a collective agreement is in everyone's interests. It has to provide industrial peace to us as a government and for our economy.”

October budget

Meanwhile, Mr McGrath said  the Government cannot respond every month with a different set of measures to address rising inflation.

The autumn would be the time to introduce additional social welfare measures, he told RTÉ’s Morning Ireland. That would be when heating and energy bills would start to rise and people would need the most help.

In the meantime there would be additional supports available through the Department of Social Protection in the form of the exceptional needs payment which could assist with energy, food, clothing and day to day necessities, he said.

Mr McGrath said that people should not be faced with “awful choices” such as whether to spend money on food or clothing. “If people genuinely need support to get by, please do reach out.” The Government had to ensure they would have sufficient resources available in the autumn, every option would have to be carefully considered. The more resources there were available the greater the options and flexibility.

Mr McGrath said that the Government’s focus was on preparing for the Budget, the first step was the Summer Economic Statement which was to clarify what funding was left to spend for the remainder of the year. Every effort would be made to protect people’s living standards, but it was not possible for the Government to offset every increase.

“As a Government we need to get the balance right.” When asked if a double social welfare payment would be made as had been suggested by a number of agencies, Mr McGrath said it would be given careful consideration. He acknowledged that there would need to be an increase in the core social welfare rates, but again, the issue was “getting the balance right” including changes to the taxation system and addressing day to day costs to healthcare, childcare, rent etc