PUBLIC SERVICE:CIVIL SERVANTS, health sector staff, local authority personnel and other categories of workers in the public service over the age of 50 are to be allowed to retire early under a new scheme announced by the Government.
The Government is also to change the application of the controversial public service pension levy with very low earners to be made exempt from the measure.
New incentivised career break and shorter working year schemes are also to be introduced in the Civil Service.
Under the new early retirement scheme, staff over 50 will be able to retire on a pension based on their years of service. However those who opt to leave will receive only 10 per cent of their lump sum immediately with the balance paid when they reach the normal retirement age of 60 or 65 years.
At present lump sum payments are tax-free. The Government said that the lump sum balance to be paid in future years would be subject to the tax provisions in place at the time the application to retire early was approved.
The lump sum to be paid to those retiring early will also be calculated on the basis of the number of years served. At present the lump sum is determined on the basis of 3/80th of salary per year of service to a maximum of 120/80ths.
The Department of Finance said the new early retirement scheme would apply to staff in the Civil Service, local authorities, the health sector, non-commercial State bodies and certain other areas of the public service.
However it is understood the measure will not apply to groups such as gardaí or fire service personnel where existing early retirement schemes are in place.
The Department of Finance also said that not all staff in the education sector would be eligible for the new scheme.
Under the rules of the new scheme staff who leave will not be replaced except in specific cases or circumstances sanctioned by the Department of Finance.
The Department said the scheme would be open to applications from the beginning of May 2009 and that its continued availability would be reviewed before the end of the year “in the light of experience”.
It said the new scheme was the only early retirement measure that the Government intended to make available.
The changes to the pension levy announced yesterday will cost the Government €100 million this year and €150 million in a full year.
Low earners will benefit from the move while those earning more than €60,000 will pay slightly more.
As part of the reforms the first €15,000 of earnings will be considered exempt, while 5 per cent will apply on the next €5,000, 10 per cent on earnings between €20,000 and €60,000 and 10.5 per cent on earnings above €60,000.
