Public Sector Reforms

ei.sdraob

Riskymove wrote: »

yes we can see that a chart of average gross wages wont be affected by the levy or other taxes....the fact that people will hide behind that is of no benefit

the key thing in sorting our present situation is reducing expenditure and that is what is going on....gross wages are only part of that equation

for the nth time

is there any data to support this

15% drop figure

or it just hot air?

Riskymove

ei.sdraob wrote: »

can you go to an ATM at end of month and withdraw from your pension?

no?? see not an income

er...of course you can

if you want to count it as an income then why should it not be taxed as an income?

pensions are taxable

since average PS wage is well into the 40% taxband that "income" would be great addition to exchequer

hmm i think perhaps you are talking about pension contributions here, as opposed to pensions? is that the case?

The_Honeybadger

ardmacha wrote: »

Of course private sector figures are skewed by the hundreds of thousands that have become unemployed, because there was no demand for their services. Public services remain in demand, when even modest short time working was proposed there was an outcry against it. When you talk of a pay cut it is always the gross you are talking about. So compare like with like.



What is a pension only income. Please explain.

Demand? Weren't we told all public servants could take 12 days off with no effect on services? The outcry was because the general public thought that the last thing the most pampered section of society needed was time off, and they preferred a paycut. I take your point about discussing paycuts in gross, but my point is that the actual take home pay is not even down 10%, that is getting off easy compared to being made redundant. And when you talk of demand don't think for a second that the Gov wouldn't lay off thousands of PS if it could get away with it. The reason many people are still in jobs is that they are PS.

Riskymove

ei.sdraob wrote: »

for the nth time

is there any data to support this

15% drop figure

we cannot provide data for how much wages have dropped in 2010 as the paycut has only been implemented...we need some data at year end to compare to get the actual amount of the drop

however, the 15% figure mentioned relates to the impact of measures taken so includes both a change to gross pay and the levy...therefore gross pay will not drop by 15%

ardmacha

is there any data to support this
15% drop figure

Well since you seem so interested, you tell us what the saving from the pension levy and the recent pay cuts was.

The_Honeybadger

Riskymove wrote: »

well perhaps you can agree that the cost of the public sector to the exchequer has been reduced at least?

arguments over gross and net pay with the levy etc can go in circles

the bottom line is that a couple of billion have been shaved off the pay bill over the last year or so

Of course i agree that they have taken a cut but it is not as large as many of them would lead you to believe. Anybody in the PS earning over 40k has no reason to complain IMO

ei.sdraob

Riskymove wrote: »

er...of course you can




pensions are taxable



hmm i think perhaps you are talking about pension contributions here, as opposed to pensions? is that the case?

if pensions were counted as income, as yee insist on calling them income!

they be taxable at 40% band (since most PS workers are well above the lower band)

are the pensions taxed at 40% ? (that be something )

do you still insist on calling "pensions" as "income"

Riskymove wrote: »

we cannot provide data for how much wages have dropped in 2010 as the paycut has only been implemented...we need some data at year end to compare to get the actual amount of the drop

however, the 15% figure mentioned relates to the impact of measures taken so includes both a change to gross pay and the levy...therefore gross pay will not drop by 15%

look im not denying that there were no cuts

i just want to know where this 15% figure came from?

any figures anything?? to back this up

Riskymove

ei.sdraob wrote: »

if pensions were counted as income

they be taxable at 40% band (since most PS workers are well above the lower band)

are the pensions taxed at 40%

do you still insist on calling "pensions" as "income"

***scratches head***

My understanding is that if I have a pension of say €100,000 a year then I pay tax on that as if it was a salary

(since most PS workers are well above the lower band)

wrong

[

B]look im not denying that there were no cuts[/B]

i just want to know where this 15% figure came from?

the 15% is based on an average pay cut of 7.5% and an average levy of 7.5%

thats before all the tax changes that everyone had to bear

ei.sdraob

Riskymove wrote: »

***scratches head***

My understanding is that if I have a pension of say €100,000 a year then I pay tax on that as if it was a salary

how much tax would you pay on 100,000 income

calling pensions as income is daft

walk into a bank and ask for a mortgage based on your pension "income"

the 15% is based on an average pay cut of 7.5% and an average levy of 7.5%

pension levy off 7.5%

since pension is not an income that you can withdraw at end of month at an ATM

how is that a paycut?

its a cut on your future bonus (pension when you retire) not a cut on your current income


so when we get to it the figure is 7.5% cut which i can believe in

not 15%

Riskymove

ei.sdraob wrote: »

how much tax would you pay on 100,000 income

according to an online tax calculator around €31,000

calling pensions as income is daft

walk into a bank and ask for a mortgage based on your pension "income"

I dont think they'd give too many pensioners a mortgage


again i think you are not reading the replies given to you......why would a pension not be an income?


...are you talking about pensions?......or pension contributions paid towards your future pension ?

ZYX

ardmacha wrote: »

The pension levy (not shown in the CSO data above) is a 7.5% drop and there has been a further 7.5% drop in 2010. And don't be coming up with nonsense that the pension levy is not a paycut.

Perhaps you can show that it is only 14%.

Average public sector worker earns 50,000 a year. Pay cut this year is 3,000 (5% on first 30k, 7.5% on next 20K). Then take off pension levy of 7.3% leaves €43,570 which is a total drop of €6,430. This gives a total cut in pay of 12.8%.

However this has to be balanced against the fact that many public sector worker received a pay increment of 6% over last 2 years giving them a total reduction of 6.8% which is more or less the same as the current rate of deflation

Count Dooku

Riskymove wrote: »

again, good in theory...but some public organisations exist to spend money!!

if you are talking about the cost of the organisation itself (i.e. staff and operations) there are some possibilities

but for example how can a teacher be judged in such a way or a Garda?

That’s fine,
Lets skip this type of performance measurement for gardai and teachers
They can use their own ways to measure performance. But this type of performance measurement can be used for any pen pushers, which consist about 30% of public services.

Riskymove wrote: »

in the operation of the public service it really needs to be a case of making your spend more efficient as opposed to reducing it

Before give money to public sector we need to be sure that money will be not wasted. When they will learn how to do maximum with minimum of finances by optimising internal processes, then we can give them more. Money must go for schools and roads, not for paper, coffee and salaries of clerks
Current crisis is the best opportunity to do it

ei.sdraob

Riskymove wrote: »

again i think you are not reading the replies given to you......why would a pension not be an income?

* once again can you withdraw this "income" from ATM at end of month?
* can you mortgage your house based on this "income" ?


pension is not income, its a future bonus (when you retire)


hence a cut in pensions is not a cut in income, its a cut in bonuses


btw how do you feel about bankers bonuses

ardmacha

Persion Levy 2009
Irish Times
"On average, the levy will be 7.5 per cent"

Pay cuts 2010

Irish Times
"cuts ranging from 5 per cent to 15 per cent".

Now it all depends on the exact salaries people get and so on, but 15% seems about right. Better paid folks are down 20%, which is a non trivial reduction.

Riskymove

how is that a paycut?

its a cut on your future bonus (pension when you retire) not a cut on your current income

cause its an arbitary reduction in the take home used to pay mortgages, child care etc

how is that not a pay-cut?

Its also done without any guarantees about your pension when you retire

ei.sdraob

Riskymove wrote: »

cause its an arbitary reduction in the take home used to pay mortgages, child care etc

how is that not a pay-cut?

Its also done without any guarantees about your pension when you retire

now you telling us public sector pensions are not guaranteed?


is there any data on take home pay of public sector workers (after all levies, taxes etc)? anything ??

The_Honeybadger

ZYX wrote: »

Average public sector worker earns 50,000 a year. Pay cut this year is 3,000 (5% on first 30k, 7.5% on next 20K). Then take off pension levy of 7.3% leaves €43,570 which is a total drop of €6,430. This gives a total cut in pay of 12.8%.

However this has to be balanced against the fact that many public sector worker received a pay increment of 6% over last 2 years giving them a total reduction of 6.8% which is more or less the same as the current rate of deflation

You forgot to mention that the pension levy is tax deductible, actual net effect is about 4%,

Riskymove

ei.sdraob wrote: »

* once again can you withdraw this "income" from ATM at end of month?
* can you mortgage your house based on this "income" ?

pension is not income, its a future bonus (when you retire)

hence a cut in pensions is not a cut in income, its a cut in bonuses

)

:eek:

if you are retired and getting paid a pension, it is an income

you pay tax on it, you can keep it in the bank and can take it out of an ATM

you can even get a mortgage on it

if you cannot grasp this concept i dont see much point in continuing

Riskymove

ei.sdraob wrote: »

now you telling us public sector pensions are not guaranteed?

they are not

if the state really had no money they would not be paid

there is no fund invested to pay them, its all from current expenditure

the terms and conditions can be changed any time by the Government

ardmacha

You forgot to mention that the pension levy is tax deductible, actual net effect is about 4%,

All wage cuts or reductions in income of any sort are tax deductible, not just those in the public sector.

ZYX

mickeyk wrote: »

You forgot to mention that the pension levy is tax deductible, actual net effect is about 4%,

Well no in fairness the paycut for average worker earning 50K is 12.8% Yes some earning higher amounts will pay more but those earning less pay less. Someone earning 35K (average pay in Ireland) will be down 10.5%

Riskymove

ardmacha wrote: »

All wage cuts or reductions in income of any sort are tax deductible, not just those in the public sector.

he means a tax relief is available on the levy payments

The_Honeybadger

ZYX wrote: »

Well no in fairness the paycut for average worker earning 50K is 12.8% Yes some earning higher amounts will pay more but those earning less pay less. Someone earning 35K (average pay in Ireland) will be down 11%

Pension levy took about 4% off the gross you calclated it at 7.3%, this is taken before tax. Both private and public sector are entitled to put their pension contributions against tax so the effect was not 7.3% but closer to 4%

ei.sdraob

Riskymove wrote: »

:eek:

if you are retired and getting paid a pension, it is an income

you pay tax on it, you can keep it in the bank and can take it out of an ATM

you can even get a mortgage on it

if you cannot grasp this concept i dont see much point in continuing

can you withdraw that money before you retire?

Riskymove

ei.sdraob wrote: »

can you withdraw that money before you retire?

I have mentioned a few times that I think you are talking about pension contributions to a fund rather than a pension and i think this confirms it

ZYX

mickeyk wrote: »

Pension levy took about 4% off the gross you calclated it at 7.3%, this is taken before tax. Both private and public sector are entitled to put their pension contributions against tax so the effect was not 7.3% but closer to 4%

No MickeyK. My figures are correct. I am talking about the reduction in gross pay. Tax relief does not come into it.

The_Honeybadger

ZYX wrote: »

No MickeyK. My figures are correct

I assure you tax relief is available on the pension levy contributions, same as the one I get for my paltry PRSA, as riskymove pointed out above. Check it up if you must but your figures are incorrect, knock at least 2% off your 12.8% but probably more

Edit: 4% comes off the gross pay after tax relief

Riskymove

mickeyk wrote: »

I assure you tax relief is available on the pension levy contributions, same as the one I get for my paltry PRSA, as riskymove pointed out above.

indeed the levy itself would be calculated on the average 7.5% of the gross but that figure would then be subject to tax relief when actually paying it

EDIT: so in a sense while the gross would be reduced by the 12% opr whatever, you would gain back a bit in your net pay through a reduction in income tax

ZYX

mickeyk wrote: »

I assure you tax relief is available on the pension levy contributions, same as the one I get for my paltry PRSA, as riskymove pointed out above. Check it up if you must but your figures are incorrect, knock at least 2% off your 12.8% but probably more

As I said I am talking about gross pay. Tax relief does not come into it. You are taking the net effect after tax and comparing it to the gross salary which is not a fair comparison. You need to compare net pay cut to net salary.

ardmacha

All wage cuts or reductions in income of any sort are tax deductible, not just those in the public sector.
he means a tax relief is available on the levy payments

The point is that whether you get a tax relief or just don;t get taxed on income you don't have, the effect is exactly the same.

There is sometimes an attempt here is say that private sector wages have fallen by 10% or whatever and then compare that with net falls in the public sector. This is not a proper comparison.