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Cabinet approves publication of new Public Sector Pay Legislation

The Minister for Public Expenditure and Reform Michael McGrath TD, today (Tuesday), secured cabinet agreement for the publication of the Public Service Pay Bill (2020) which will enable progress on implementation of the Sláintecare Consultant Contract - a key element of the Sláintecare health reform agenda. The contract will require consultants employed by the State to focus 100 per cent of their time on public-only work within the public health system.  

Under the Financial Emergency Measures in the Public Interest (FEMPI) Acts, no changes may be made to public service pay for particular groups or individuals in the absence of legislative amendment. This limits the Government’s ability to deliver key policy commitments as they arise. Minister McGrath commented, “The Government is committed to reform of our health services and the Sláintecare Consultant Contract is key to that.  This legislation will enable this Contract to be progressed by my colleague the Minister for Health over the coming months.”

The Government also approved the signing of an order, as required under The Public Service Pay and Pensions Act 2017, for the completion of the operation of the Public Service Pension Reduction (PSPR) introduced under the Financial Emergency Measures in the Public Interest Acts. This means that PSPR will cease to apply to any public service pensions from 1st July 2021. Minister McGrath said “The Public Service Pension Reduction has made a significant contribution to stabilising the public finances since its introduction in January 2011. There has been an ongoing process of unwinding both pay cuts and pension reductions in recent years. As required by legislation, we are now at the point where the remaining 3% of public service pensioners must be removed from the impact of PSPR in the period ahead. "Section 27 of the 2017 Act provided for the longest deferral, which was legally permissible, to the restoration of the pension reductions. It requires an order to be made by the 31st of December 2020 providing a date for the restoration of the pension reductions and I am advised that this requires the reduction to be restored within a reasonable time from the making of the Order which, having regard to the provisions of the Act, could not be later than the 1st of July 2021".

The unwinding of PSPR commenced in January 2016 and the requirement to set a date for its removal by 31st December 2020 was set out in the Public Service Pay and Pensions Act 2017. Approximately 4,000 current retirees will be impacted by the change.