Retiring consultants' lump sums top €400,000

THREE CONSULTANT psychiatrists employed by the HSE last year received tax-free retirement lump sums in excess of €400,000.

According to figures made available arising from a Freedom of Information request, the HSE revealed that the top 25 retirement payments in 2010 were all paid to retiring consultants.

The figures show that one consultant psychiatrist received €412,384 on retiring in September of last year, with the top 25 receiving amounts ranging from €330,691 to €412,384.

The other two consultant psychiatrists to receive in excess of €400,000 received €407,621 and €405,656.

The figures from the HSE show a large increase in retirement lump payments over the past two years.

They show that 2,248 employees retired from the HSE last year, receiving a total of €97.3 million in retirement lump sum payments.

This compares to 2,609 staff retiring in 2009, receiving a total of €153.8 million. The figures for 2008 show that 1,787 staff retired and received €88.35 million.

The 46 per cent increase between 2008 and 2009 and the 25 per cent between 2008 and 2010 in the numbers seeking to retire may be explained by the Government indicating changes to the taxing of retirement lump sums in 2009.

Lump sums before 2011 were tax free. However, a spokeswoman for the HSE confirmed changes in relation to retirement lump sums in the Finance Act 2011.

She said that this provides that the maximum lifetime retirement tax-free lump sum is €200,000 as on and from January 1st, 2011.

“Amounts in excess of this tax-free limit are subject to tax in two stages – except for specified exclusions. The portion between €200,000 and €575,000 is taxed at the standard rate of 20 per cent while any portion above that is taxed at the individual’s marginal rate of tax,” she said.

Fianna Fáil Health spokesman Billy Kelleher said yesterday: “These are huge sums, but they are part of the contract with the staff concerned. You can’t tear up those terms and conditions.”

He added: “What we can deal with is the present and the future, and make sure future awards take into account the economic circumstances that we find ourselves in.”