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Higher pension levy hits Ahern and Cowen - by €80 a week

High earners will still keep the vast majority of their huge pensions, as Brendan Howlin admits there is little the government can do.

The pensions of former Taoisigh Bertie Ahern and Brian Cowen are being cut by around €80 a week under the government's new regime.
The pensions of former Taoisigh Bertie Ahern and Brian Cowen are being cut by around €80 a week under the government's new regime.
Image: Mark Stedman/Photocall Ireland

THE MASSIVE PENSIONS of former taoisigh Bertie Ahern and Brian Cowen will be cut by the government’s new plans for cutting public pensions – but only by around €80 a week.

Plans announced in the Dail last night by public expenditure minister Brendan Howlin outlined how the government would put a 20 per cent levy – essentially a tax – on any pensions above €100,000 per year.

The new levy will mean that people on pensions worth €150,000 a year will lose around 12.5 per cent of their overall entitlement – but with the majority of those levies already being in place, the new rules will mean large earners may barely notice the cuts to their pensions.

Former taoiseach Bertie Ahern – who €152,332 annual pension is the highest of any former minister – will see his pension levied by a further €4186.53, the equivalent of €80.51 per week.

Brian Cowen, whose annual pension is just under Ahern’s at €151,061 a year, will lose €78.56 a week, or €4084.94 over the course of a year.

The levy will also apply to former president Mary McAleese, who is entitled to half of her existing salary – of some €325,000 a year – as an annual pension.

Her yearly income, of €162,754, will be reduced by a further €5,020 per year on top of the levies that she is already required to pay.

Speaking on RTÉ’s Morning Ireland, Howlin admitted that there was little that the government could do to reduce the pensions by more, because public servants have legally earned the pensions to which they are now entitled.

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“We’re trying to undo decades of profligate pay and pension provision, laid down in law, in contract deals and so on. It’s been an extremely difficult process,” the minister said.

“There is no civil servant earning more than €200,000 now… We’ve a way to go, but we have to do it within the confines of the legal instruments and the constitution.”

In full: What former ministers get after the government’s new levy >

Read: Government announces cut to public sector pensions over €100k >

In full: what former ministers get after the government’s new levy

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Gavan Reilly

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