Government IT staff offered loyalty payments

In late 1998, almost 400 information technology staff in the Irish civil service were offered a once-off tax-free "loyalty bonus" of up to IEP 6,000 if they would remain working with the government's Year 2000"millennium bug" project for a further 18 months.

Almost 400 information technology (IT) staff in Ireland's civil service were offered a special IEP 6,000 tax-free bonus payment in late 1998, in return for agreeing to continue working on the government's Year 2000 (Y2K) plan, a project aimed at resolving computerisation problems associated with the so-called "millennium bug". The IT staff concerned work at either executive officer (EO) level, which has a maximum annual salary of IEP 20,000, or at the higher executive officer (HEO) grade, which pays a maximum of IEP 27,000 per annum. Given that the bonus, which is payable on 1 April 2000, will come in the form of a non-taxable payment, the reward for staying is attractive.

There is growing concern in the civil service about the departure of trained IT staff to the private sector, where they can typically earn an additional IEP 12,000 (gross) per annum. Given that staff in the two civil service grades pay income tax at the higher rate of 46%, it is evident that the bonus is pitched at offsetting the average gross differential between private and public service pay.

Between January and June 1998, some 10% of all 700 IT staff in the civil service moved to the private sector or were promoted to other government jobs. A spokesperson for the Public Service Executive Union (PSEU), which represents most of the IT staff targeted by the loyalty bonus, said that more recent figures would indicate an increase in the outflow of IT personnel for the latter half of 1998.

The Y2K project is aimed at ensuring that all Government computers are immune to the "millennium bug." The Government appears to be actually ahead of the private sector in this area, but private sector demand for expert staff is fuelling the demand for those experienced in Y2K preparations.

In an effort to retain such expertise in the long-term, the Department of Finance has also indicated that the EO and HEO levels will be allowed accelerated progression up their respective scales. However, the PSEU is to lodge a counter-claim seeking a permanent IT allowance, arguing that those at the top of the scale would not benefit from accelerated progression. It says that the Department of Finance is targeting younger staff who are more likely to find an offer from the private sector an attractive proposition.