The Kettle's Boyled: When money is scarce, pay the TDs

The government set up the National Shared Services Office in 2012 to provide human resources, payroll administration and finance services for government departments and public service bodies, a standard model across all modern countries. There was a lot of overlap and duplication across various arms of government and bringing these services under one umbrella made sense.

The NSSO grew to have 800 staff and they pretty seamlessly managed the transfer from individual departments doing their own payroll and administration to the shared services model. It was a piece of modernisation that nobody could argue with and it worked very well, until it didn’t.

Until a few weeks ago, most people had never heard of the NSSO, nor would they have had any reason to be concerned about it. Like the way the lights come on in your car when you open the door, nobody cares as long as the lights come on. But then they didn’t.

A recent audit found the NSSO made ongoing errors over several years in respect of pension deductions from the salaries of public servants, including Oireachtas members. And as is often the case in episodes like this, many errors were not made in favour of the exchequer. So there is money to be repaid to the State, if they can get it back.

People who have died and had their estates liquidated under probate may form a part of the overpaid cohort, so the taxpayer won’t see any of that money. Around 13,000 retired civil servants are having their pensions audited to see if they owe money to the State or if they are owed money, and to ascertain the scale of that indebtedness.

At the top end, the figures are significant. Ministers in the current administration may owe thousands of euro, up to €30,000 according to some sources, although some may have been underpaid and be owed money. But instead of writing off the overpayments or ignoring the underpayments, Minister for Public Expenditure Jack Chambers has committed to ‘fully and comprehensively’ address the matter and to ensure all monies owed to the State are fully recouped and ‘money owed to individuals is refunded.’ 

It's great to hear a commitment from a Minister to do what is right, but the inconsistency is staggering. Back when the NSSO was set up and money was scarce, then Finance Minister Michael Noonan took 0.6% out of pensions savings each year over two years in a budget-balancing raid described by the pensions regulator as ‘legal, but not necessarily fair.’ He returned for 0.75% the following year, a total raid on the savings of working people of €2.5 billion. Affected pensioners are typically suffering up to €1,000 a year in pension deductions, but unlike underpaid public servants there is no sign of the government refunding them.