2025-12-11

12. Deputy Michael Murphy asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if his Department has assessed the potential cost implications for public service pay and pension liabilities that would arise in the event of Irish unification. [62807/25]

To what extent has the Department assessed the potential cost implications for public sector pay and pension liabilities that would arise in the event of Irish unification? This is not a political question. It is a simple question of forward planning, good governance and having all the facts in the context of this important debate.

The gross Exchequer estimated pay bill for Ireland's public service is €30.4 billion for 2026. In terms of staffing, forecast numbers in 2026 are just under 439,400 full-time equivalent public servants. This is the highest ever level of employment in the public service. Overall, the pay bill is a function of public service numbers and the costs associated with public service pay agreements. The current agreement, Public Service Agreement 2024-2026, was agreed in January 2024 and ratified by public service unions and representative associations in March 2024. This agreement achieves a balanced approach to public service pay in the context of both the State's fiscal position and the broader economic environment. The agreement provides for general round increases totalling 9.25% and a provision for local bargaining of 1% of the basic pay cost. In total, the agreement will cost approximately €3.6 billion spread over four budget years. There is a complex multiplicity of pension arrangements within the Irish public service, encompassing schemes with differing provisions that apply to staff recruited prior to 1995, post 1995 and post 2004, as well as the Single Public Service Pension Scheme introduced in 2013. The gross Exchequer pension bill in 2026 is estimated to be €4.9 billion, which will support a projected 200,700 public service pensioners. The latest value of the State’s accrued-to-date liability in respect of public service retirement benefits for active employees, pensioners and deferred members has been calculated as €175.7 billion. This will fall to be paid over the next 70 years or so. Northern Ireland’s pay and pensions are subject to different arrangements, with different grades, pay scales, premium payments and superannuation payments. An assessment of pension costs requires individual member data along with detailed data on the varied pension scheme rules and entitlements by sector, for example, the civil service, health, education and local authority sectors. Such an exercise constitutes a complex and substantial analytical undertaking.

I support the long-term aspiration of Irish unity based on consent. However, if we are serious about this aspiration, we also need to be serious about the practicalities that come with it and the financial implications. Right now, there is little discussion about the fiscal implications of Irish unification, particularly disparities that exist in public sector pay and pensions, social protection systems, taxation, health and infrastructure. This is not a political question. It is simply a question of good governance and having all of the information. The Good Friday Agreement provides a democratic pathway for constitutional change, but that pathway requires facts, not assumptions. My question is simple. Has the Department assessed the potential cost implications for the State? If we want to be informed and want responsible debate, we must first establish a clear understanding of the potential financial landscape.

Such an exercise constitutes a complex and substantial analytical undertaking requiring access to detailed, contemporaneous micro-level data on the pay structures and pensions of both current and former employees in order to accurately assess the full costs. It also involves a range of assumptions in relation to the pay and pensions policy implications. My Department does not have access to the required level of detailed data relating to the remuneration and pension arrangements of public servants in Northern Ireland to set out that context. I have some macro data here. We know that the total size of the public service of Northern Ireland, inclusive of civil service, health, education, police and local government employees, is estimated to indicate approximately 227,500 in October 2025. The annual pay bill is estimated to be approximately 14.4 billion for core civil service and departmental staff. I have been told that this increases to approximately £18 billion when the wider public services are included. Total public expenditure for the Northern Ireland Executive is estimated at €32 billion in 2025. I have set out some high-level data from the team who assessed the Deputy's question. It would require a lot more specific and micro-level data to answer it, however.

I am sure the Minister agrees there are huge disparities between systems North and South in public sector pay structures, pension liabilities, welfare supports in particular, and broader public spending. Any future settlement, whenever it might arise, will have significant financial consequences for this State. Ignoring that reality does not make it go away. All I am seeking, and what the public deserves, is clarity on whether the State has even begun to model these implications. If unity is ever to happen, it must be built on facts and not on vague assumptions or political slogans. My question is really about sensible and prudent long-term planning, nothing more and certainly nothing less.

That is why I stated that to give an accurate picture would require a detailed analytical assessment. Pay and pension provisions are subject to different arrangements across different grades, pay scales, premium payments and superannuation payments. In the context of the Deputy's question, we have not been able to put a number beside the information he has requested. That would be an important consideration.