The government has this weekend been called upon by Fianna Fáil to clarify the impact on some of the country’s top civil servants of the change in PRSI introduced in the budget. This comes amid claims that the change will cost some highly paid civil servants less than 5% of the cost imposed on ordinary workers.
The removal of the weekly PRSI allowance in the budget could cost some of the country’s top civil servants as little as €12 per year while ordinary workers earning €18,500 will pay an extra €264, according to Fianna Fáil Finance Spokesperson Michael McGrath.
Deputy McGrath stated, “In the budget, the government abolished the PRSI free allowance for workers earning over €352 per week (€18,300 per year). For the overwhelming majority of workers in the country, this change will cost them €264 per year. However, for certain civil and public sector employees who pay modified rate contributions, the change will cost them only €12 per year.
“Permanent and pensionable civil and public sector employees recruited before 6 April 1995 are classed as modified rate PRSI contributors and fall in to PRSI classes B, C or D. They only pay PRSI at a rate of 0.9% on earnings up to €1,443 per week and at a rate of 4% per annum beyond that. The removal of their PRSI free allowance of €26 per week will cost them a miserly 23 cent per week or €12 per annum.
“The abolition of the PRSI allowance was a deeply unfair and highly regressive move by the government. By its very nature, it will have a massively disproportionate effect on workers on low and middle incomes. However, it would rub salt into the wounds if the some of the best paid civil and public servants in the country are virtually getting off scot free from the PRSI change.
“I am calling on the government to clarify this matter immediately.”