Exploding public pay rates

[Proposition Joe]

It effectively makes the tax rate 58.5% for earnings over €35k. Along with Class A PRSI (vs Class S for the many self-employed in private sector), it's ~ 10% higher tax than equivalent private sector on a purely financial term.

Your PRSI comparison is highly misleading.

The vast majority in the private sector pay full class A PRSI.

Whereas a significant number in the public sector (pre-1995 entrants) pay the lowest PRSI rate of all, a paltry 0.9%.

On the pension levy, the PS-boosters on this site never tire of calling it a pay cut in disguise. In that sense it only serves to reflect the wide-spread pay-cuts that have occurred in the private sector. So the PS is no worse off in relative terms than it was at the start of the down-turn. Which is to say, still approximately 20% better off than the private sector on average, without even taking into account the value of the pension and job security.

[wexfordman]

Pension levy. It effectively makes the tax rate 58.5% for earnings over €35k. Along with Class A PRSI (vs Class S for the many self-employed in private sector), it's ~ 10% higher tax than equivalent private sector on a purely financial term. (that is before any deductions you may make e.g., for changes between single married and so on....it's just a gross figure).

So, even with high quoted gross salaries, it's not very attractive. Net salary makes it "not worth it" IMHO.

Ahh, I see now, you mean the "spinned" version!!! Its amazing how you can spin things, almost funny, except it makes you look stupid when you are serious about it.

The levy is a payment towards your pension, or a pay cut etc etc, which ever way you want to put it.

How about this more, common private sector comparison

Salary of say 50k, tax at what 42% pus 7.5% prsi = 49%
Defined contribtion pension scheme, 20% of salary, that makes ahhmmmm
69% tax rate in the private sector, there or there abouts!!

[jimmyfour]

Your PRSI comparison is highly misleading.

The vast majority in the private sector pay full class A PRSI.

Whereas a significant number in the public sector (pre-1995 entrants) pay the lowest PRSI rate of all, a paltry 0.9%.

Thanks for that! It's so easy to start spinning and movign the goalposts.

"vast majority" = what is the exact number?

"significant number" = what is the exact number?

The reason there is such ambiguity, is because there are those in the public sector paying punitive rates on lower salaries, and also lower rates on higher salaries. Likewise in the private sector. Therefore, without actual numbers as to who is paying what (and anyone who is working the publci sector for the last 14 years, so in their mid-30s/40s is paying Class A) the focus needs to be changed as to *who* is paying not where they work or what they do.

Basically anyone in that demographic is the target for further tax increases.

[judehamilton]

Whereas a significant number in the public sector (pre-1995 entrants) pay the lowest PRSI rate of all, a paltry 0.9%.

PJ, 1995 is 14 years ago! So maybe as many as a third to a half of current staff pay full PRSI.

The sad thing about this thread is that it demonstrates the success of a conniving, ill-intentioned and divisive government in creating a rift between public and private sector workers. That is reprehensible and unforgivable.

All workers are paying the price of profligacy and political expediency of Fianna Fail and the excesses of bankers and developers. That is what workers should focus on, not on fighting amongst themselves. We saw it al before with Ansbacher, ICC, AIB, PMPA. Fatcats walk away unscathed while ordinary people pay the price.

[wexfordman]

PJ, 1995 is 14 years ago! So maybe as many as a third to a half of current staff pay full PRSI.

The sad thing about this thread is that it demonstrates the success of a conniving, ill-intentioned and divisive government in creating a rift between public and private sector workers. That is reprehensible and unforgivable.

All workers are paying the price of profligacy and political expediency of Fianna Fail and the excesses of bankers and developers. That is what workers should focus on, not on fighting amongst themselves. We saw it al before with Ansbacher, ICC, AIB, PMPA. Fatcats walk away unscathed while ordinary people pay the price.

It is the ps unions who are creating the divide. They somehow see themselves above the private sector in that they above all should nto have to pay cuts. Thats why you have the levy, becasue you wont or refuse to face a pay cut that is needed simply cos the money is not available, revenue is falling.

It is the ps unions who are creating the divide, looking at private sector workers losing jobs and taking pay cuts, and refusing to take a pay cut themselves, which ultimately means that those same private sector workers have to fund the refusal of ps workers to take pay cuts.

[Proposition Joe]

Thanks for that! It's so easy to start spinning and movign the goalposts.

Cmon now Jimmy, t'was you who started the spinning by choosing to only compare the post-95 PS with the self-employed.

My post was more in the line of counter-spin

"vast majority" = what is the exact number?

"significant number" = what is the exact number?

Obviously I don't know the exact numbers. In fact I doubt if anyone does, given the crazy myriad of different T&Cs, and the hodge-podge of incompatible HR and payroll systems uncovered during the PPARS debacle.

But it would be very safe to say that the average rate of PRSI paid in the public sector is lower than the average paid in the private sector.

The reason there is such ambiguity, is because there are those in the public sector paying punitive rates on lower salaries, and also lower rates on higher salaries. Likewise in the private sector. Therefore, without actual numbers as to who is paying what (and anyone who is working the publci sector for the last 14 years, so in their mid-30s/40s is paying Class A) the focus needs to be changed as to *who* is paying not where they work or what they do.

I totally agree with you that the most productive demographic, i.e. the 30/40-somethings have and will continue to bare the brunt. Screwed on all fronts given the child benefits changes, mortgage interest relief cuts and the likelihood of negative equity. Contrast with the generation now in their 50s having got their kids through college on the cheap, bought their house pre-boom for a song and now having cushty early retirement offered on a plate if in the PS.

[X-ray]

You let people set their own wages and conditions with in the private or public sector and you get this. People are greedy.
I am PS worker and I would 110% supported cleaning these guys out, just I am sure most bank workers would support controls on the leaders of banks.
As a country we have totally lost our way.

[selfemployedmar]

Pension levy. It effectively makes the tax rate 58.5% for earnings over €35k. Along with Class A PRSI (vs Class S for the many self-employed in private sector), it's ~ 10% higher tax than equivalent private sector on a purely financial term. (that is before any deductions you may make e.g., for changes between single married and so on....it's just a gross figure).

So, even with high quoted gross salaries, it's not very attractive. Net salary makes it "not worth it" IMHO.

On your point on the S Class.

On the Class S for the self-employed, we are penalised for having this.

We are not allowed to claim the PAYE credit that A1 allows.

We dont get reduced Dental, we pay the full amount

We dont get reduced Eye tests etc, we pay the full amount.

We pay the pension levy.

We are not allowed disabilty benefit.

We won't get dole if our business goes belly up.

We pay preliminary tax for self assessment, a year in advance of our generated business.
Subject to of 5% fine if we dont.

All employees are A Class




Who is better off??? Not the private sector.

[selfemployedmar]

Rules
PRSI Classes and people insured in each Class
Class A applies to people in industrial, commercial and service type employment who are employed under a contract of service with a reckonable pay of €38 or more per week from employment. It also includes civil and public servants recruited from 6 April 1995. In fact, most employees in Ireland pay PRSI Class A.

A1 applies to employees who have reckonable earnings in excess of €500 per week
A2 applies to employees who hold medical cards and those getting Widow's/Widower's Pension, Deserted Wife's payment or One-Parent Family Payment and are earning more than €500 per week
A8 was introduced in April 2000 for Community Employment workers earning less than €352 per week
A9 was introduced in April 1996 for Community Employment workers earning more than €352 per week
AO applies to employees, including medical card holders and those getting Widow's/Widower's Pension, Deserted Wife's or One-Parent Family Payment, with earnings between €38 and €352 per week are category AO
AX applies to employees with earnings of between €352.01 and €356 per week
AL is a new class introduced from January 2005 for employees on reckonable earnings in any week that they earn between €356.01 and €500 inclusive. The employee is not liable for the 2% Health Contribution.

However, the employer's share of the contribution remains at 10.75%.
Class A does not apply to people in insurable employment and over 66 years of age.
They are insurable under Class J.


Class B for the public sector

[bungo]

Ahh, I see now, you mean the "spinned" version!!! Its amazing how you can spin things, almost funny, except it makes you look stupid when you are serious about it.

The levy is a payment towards your pension, or a pay cut etc etc, which ever way you want to put it.

How about this more, common private sector comparison

Salary of say 50k, tax at what 42% pus 7.5% prsi = 49%
Defined contribtion pension scheme, 20% of salary, that makes ahhmmmm
69% tax rate in the private sector, there or there abouts!!

Very impressive, but none of that negates the point - which is that foreign entrants to the Irish PS pay a punitive tax rate, and this makes it an unattractive option.

Having said that, I would not oppose a maximum wage of 100K. In the public AND private sector - right?

Or do you believe bankers are more important, more vital to our strategic interests, than nurses and teachers?