I have been asked by Council to address the AGM in relation to the recent establishment of the Alliance of Retired Public Servants.

The Alliance came together informally last year. This arose out of a situation in which pensioners had no representation whatsoever at any of the Croke Park or Haddington Road talks and in which Emergency Legislation had repeatedly been brought forward without any involvement of public service pensioners in the process.

Public service pensioners had no voice in decisions which crucially affected them and were alienated from government.

The Alliance is comprised of pension organisations representing about 75,000 retired public servants - including former civil servants, local authority and health employees, teachers, nurses, doctors, gardai, army officers and others. Its establishment on a formal basis in January has been welcomed by the Minister for Public Expenditure and Reform and his department, and a process of structured engagement with them has now commenced. We recently met the officials, in the first instance, and we are awaiting a meeting with the Minister.

While the Alliance very much shares the concern of all pension organisations at the extent to which increased taxes, costs and charges, especially in relation to health matters, has affected pensioners, its prime focus is on the additional impact on public service pensioners.

There are four issues at the heart of our concern:

1. The need to develop an Exit Programme from the use of Emergency Powers to reduce public service pensions;
2. The removal of the discrimination against public service pensioners in relation to the application of the Universal Social Charge;
3. The need to change the practice under which eligibility for medical cards as applied by the HSE fails to take into account pension deductions made under emergency powers; and
4. The need for access to Third Party Mediation/Arbitration

The Exit Programme

When we met the Minister for Public Expenditure this time last year he welcomed the proposed establishment of the Alliance on a formal basis and he indicated his intention "as a priority" to move towards reducing the burden of public service pension reductions, with the initial focus on people in receipt of low pensions, as soon as economic circumstances permit, and he envisaged ongoing bilateral discussions with the Alliance in this regard.

Governments have gone to the public service well on three separate occasions, in 2010, 2011 and in 2013, to reduce public service pensions.

The combined effect of is that emergency powers are now being used to reduce all public service pensions above €12,000 per annum by between 8% and 28%. This is penal. For many pensioners, their actual pension rate is close to what it was nearly ten years ago.

While the common populist belief (which governments are aware of and at times encourage) is that public service pensioners as a class are fat cats. The reality in, for example the civil service, is that less than 0.1% have pensions over €100,000 and the average is in the order of €20.000.

What many people also do not realise is that public service pensioners, unlike their private sector counterparts with coordinated pensions, do not receive the DSP state pension and, if their spouses did not work outside the home, the spouse has no entitlement to a state pension.

In many cases, public service pensioners, lifelong members of the coping class, are already struggling to survive on one reduced pension and meet ever increasing costs of healthcare, property tax, water charges, etc. Their household budgets have been squeezed to the very core.

Listening to some Ministers before and after the bye elections one could determine a political will, in improved economic circumstances, to move in the budget toward tax reductions, reduced Universal Social Charge, etc.

But it would surely be obscene to have a situation in which emergency powers are being used to take money from low paid pensioners to fund tax reliefs for the rich.

An Exit Programme should now be drawn up which will lead to ending the use by government of these emergency powers. The alternative, as economic circumstances improve, is that one section of the community (public sector workers both serving and retired) will be expected to disproportionately fund recovery. This is an untenable proposition and and does not serve the common good.

The Universal Social Charge

Public service pensioners are, in practice, subjected to a major discrimination in comparison with their private sector counterparts on a coordinated pension.

This discrimination occurs because, unlike the public service pension where all income counts for the purposes of the USC, the state old age pension element of the coordinated private service pension is entirely excluded in the calculation of the USC.

Let me give a simple and stark example.

Take two pensioners, both with defendant spouses, one from the private sector (with a coordinated pension) and the other one from the public service - both with pensions of €32,500 per annum.

The public service pensioner will pay a universal social charge of €1,593.80. The private sector pensioner will pay no Universal Social Charge.

This is the equivalent of the public service pensioner being required to pay a second property tax and water charge. If it happened to private sector pensioners, there would be a revolution!

And, this does not take into account the fact that, at a pension level over €24,000 every public service pensioner is already subject, on foot of emergency powers, to a reduction of 12% before tax - on top of a deduction of 8% already made for earnings over €12,000.

Medical Card Eligibility

There is a problem also with medical card eligibilty. What apparently is happening is that, although cuts from public service pensions are being made under emergency powers, the HSE is including the cuts as income received in determining whether you can receive a medical card. This is a simple anomaly which should also be rectified urgently.

Third Party Access

While we have, as I mentioned, commenced a process of structured engagement we are at present at a major disadvantage in that pensioners, unlike workers, have no access to any third party mediation or arbitration. Any concepts of treating pensioners fairly requires this to be rectified.

Conclusion

In conclusion, Colleagues, I want to emphasis a number of points.

The central issue is not one of retired public servants wanting to avoid paying their share. They understand, better than most, the essential role effective public services play in society and are fully prepared to pay their share and have more than done so.

What they want, however, is to be treated fairly and to pay their taxes and charges on the same basis as the general public and not be subjected to the continuing use by government of emergency powers and discrimination.

A prolongation of the use of emergency powers against serving and retired public servants is increasingly untenable as economic circumstances improve. The potential for a two strand recovery with all boats rising, except the public service boat, which remains holed below the water line, has to be be avoided. Restoration of the social fabric of the state is the responsibility of the entire community.

Progress, however, is not just a matter to be handed over to the Alliance. We have close contacts with the trade union movement and with the Public Services Comittee of Congress and we support their efforts on behalf of serving staff.

Ultimately, progress will be hugely dependent on support from constituent pension organisations like the RCPSA and, above all, on the determination of individual public service pensioners to become involved and to do whatever is necessary to help secure a fair and balanced outcome.

RCPSA Approach to Budget

The Association is very concerned at the orchestrated representation of pensioners as a privileged class which has largely escaped the effects of the economic crises and which is now ripe for plucking in the upcoming budget.   This ignores the extent to which pensioners generally (by definition on substantially reduced incomes) have had their expectations of a secure old age overturned as a result of the  socialising of bank debt (the cheapest guarantee ever), the collapse in investments and domestic property values (their "nest egg" for emergencies), the  reduction in medical card entitlements, the increases in medical costs, the introduction of the social  charge and the increases in fuel and transport costs, not to mention such issues as the reduction in the carers' allowance which impacts especially on pensioners, many of whom are in declining years, are vulnerable and in ill health.   

Public service pensioners in particular are the subject of virulent attacks leading up to the budget.  The pension entitlements of politicians and top public servants are presented in a manner which suggests that public service pensioners generally are specially privileged and well off.  This ignores the fact that the average civil service pension is E 19,000 (only a fraction of 1% of public service pensioners receive pensions of over  E 100,000): that their pensions have been reduced by emergency legislation; that they do not receive the state old age pension and that the universal social charge is deducted from the total civil service pension whereas the state old age pension element of private  pension income is exempt from the charge.

The Pre Budget Submission

The Association's Pre Budget Submission is concerned with protecting the interests of pensioners generally and the majority of our proposals would, if adopted, have a beneficial outcome for both public and private sector pensioners.

The Association is, however, greatly concerned that aspects of current fiscal policy which selectively and unfairly penalise public service pensioners (who as a class have already suffered pension reductions on foot of emergency legislation) are rectified in the budget and are not used as a basis for future penalty.   This is especially the case in respect of the removal of the discriminatory application of the universal social charge to public servants and ensuring that the basis on which property and water charges are founded are fair and equitable and do not lead to further discrimination.   The restoration of public sector pensions to the pre statutory deduction level is an aspiration which is repeatedly articulated at annual general meetings of the Association.

The principal elements of the pre budget submission, in summary, are:

Apply the USC to public service pensioners on an equivalent basis to its application to private sector pensioners in receipt of the state pension

Exempt persons over 80 years of age from the USC,

Restore the level of public service pensions as soon as possible

Ensure that the new property tax:
        - applies a waiver for elderly, low income owners of high value properties,
        - takes account of earnings in setting the level of liability for property tax,
        - applies a banded system where tax is paid on a self assessment basis,
    
Exempt persons under the income tax threshold from the household charge and property tax,

Provide an easy option for incremental payment of property tax and water charges at Post Offices,

Include water charges in the household benefits package,

Discontinue the application of the 0.6% Pension Fund Levy,

Protect the Free Travel and other measures which support the independence and welfare of the elderly.