Letter to the Irish Times today on the same issue.
Pension cut a reduction or deduction?
Pension cut a reduction or deduction?
Madam, – The method of applying the recent public service pension cut is worrying.
Section 4.7 of the Four-Year Recovery Plan states: “The Government has therefore decided on a reduction . . . in the annual cost of public service pensions . . .” Chapter 6 of the Budget 2011 speech states: “. . . Legislation to provide for this reduction will be brought before the Oireachtas . . .” (my emphases).
But pension slips now show the gross pension unchanged and instead an apparent deduction of the amount in question. Would a reduction involve breach of contract by the Government because the gross pension would now be smaller than was actually paid for in contributions and agreed with the Government? Do pensioners not have ownership rights over deferred salary contributed over a lifetime and held in trust by the Government until retirement? Did the Minister feel legally unsafe presenting the cut as a reduction?
An inquiry to the Revenue Commissioners verifies that the pensioner is now taxed, not on the gross pension shown but on that gross minus the apparent deduction – the “taxable gross.” So it really is a reduction disguised as a deduction. Why? – Yours,etc,
- SEÁN FALLON (Secretary),
Retired Secondary Teachers’
Association,