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Varadkar: pay deal for local councillors nothing to do with leadership bid

Minister for Social Protection wants to offer either a PRSI cut or a state pension to councillors, as part of a wider reform.

22/7/2016 Social Protection Pre Budget 2017. Fine Leo Varadkar Source: Sam Boal

Updated 1.55pm

MINISTER FOR SOCIAL Protection Leo Varadkar has given Ireland’s local councillors two options to improve the terms under which they pay tax.

Varadkar, prior to becoming the welfare minister, had expressed sympathy for the tax situation local representatives find themselves in.

The two options being floated for councillors are:

  • an increase in a PRSI tax exemption which would see them pay roughly €660 less tax per year, or €3,300 over a five-year term, or
  • the granting of access to a state pension, among other social benefits, to councillors for the first time.

Today Varadkar told a press conference in Dublin he wanted to make the changes out of fairness.

Source: TheJournal.ie/YouTube

He also denied it was anything to do with any bid for the leadership of Fine Gael, which will require the support of councillors.

Instead, he linked it to the introduction of paternity benefit on 1 September, and proposals to bring in unemployment benefit for the self-employed.

“The proposals that I’m making to councillors is part of that wider reform,” he said.

They’re not going to get special treatment, they’re not even asking for special treatment.

“All I’m proposing is that they get fair treatment, and basically that they get the same benefits as everyone else.”

Varadkar Leo Varadkar speaking today at Meath Street credit union in Dublin 8. Source: TheJournal.ie

Leadership

Asked whether it was anything to do with the leadership of Fine Gael, Varadkar said:

No, I don’t know how many times I can say that. Can we move on?

Earlier, he said that the issues of councillors’ pay and remuneration is a matter for Ministers Simon Coveney and Paschal Donohoue.

“Any questions you have on councillors’ pay or remuneration, I’m sure you’ll direct to those ministers,” he said.

What I’m pushing for, and one that I believe in, is a move to a more European-style system of social insurance.

“And that means if you pay PRSI, if you pay into the social insurance system, then you must get something back from it.”

Favoured by councillors

It’s understood that the option of a state pension, is the one most favoured by a majority of councillors.

That would see the new measures implemented in the next budget this October.

“The Varadkar issue is to do with the Class K PRSI all members pay on their salary of €16,500,” a source within the Association for Local Government in Ireland (AILG) told TheJournal.ie.

Currently we’re not entitled to any credits for a state pension, we have no maternity benefits, jobseekers’ allowance, or social insurance credits at all.
This is despite the fact a councillor’s role is now a de facto full-time job, taking up an average of 33 hours per week.

The Class K PRSI payment was first introduced for public office holders by the then Fianna Fáil government in 2011.

The AILG is also understood to be in discussions with the Minister for Local Government Simon Coveney with regard to a hike in basic pay.

At present local councillors in Ireland earn roughly €16,500 each year.

In March it was revealed that the AILG’s members were to seek a 40% rise in pay to compensate them for the increase in workload seen with the local government reform of 2014, which saw the number of councillors in Ireland reduced to 949 from 1,627.

Additional reporting from Darragh Peter Murphy.

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