2016 pension levy reductions

payroll-outsourcing

 

The union has received a number of queries from members regarding the reduction in the so-called pension levy under the Lansdowne Road Agreement.

A degree of confusion may have arisen because the Lansdowne Road deal originally envisaged two changes in the pension levy threshold this year – one in January (raising the threshold from €15,000 a year to €24,750) and a second in September (raising the threshold from €24,750 to €28,750).

Raising the pension levy threshold reduces the amount of money deducted from pay.

The originally-planned September reduction is not happening because the full value of the 2016 pension levy reductions, set out in the Lansdowne Road agreement, was implemented in January 2016.

This was after it emerged that payroll systems could not make the September 2016 change for technical reasons. Instead, it was agreed that the January 2016 change would be larger, raising the threshold from €15,000 to €26,083, and the September change would be abandoned. This had the effect of giving the cash benefit to public servants slightly faster.

The pension levy threshold will be increased again, to €28,750, on 1st January 2017.

As well as pension levy reductions the Lansdowne Road deal also saw pay increases of 2.5% on earnings up to €24,000 and 1% for earnings between €24,000 and €31,000. All public servants earning up to €65,000 will also get increases worth €1,000 in September 2017.

Most of the 13% of public servants who were subject to additional – though temporary – pay cuts under the 2013 Haddington Road agreement will see those reductions restored in two equal phases in April 2017 and January 2018.