The State body responsible for managing civil servants’ pensions failed to pay the Revenue Commission €2.3m in tax that it had deducted from 15 retired senior civil servants.
BusinessPlus can reveal that the Comptroller and Auditor General uncovered a major hole in the finances of the National Shared Service Office last year.
It is the second multimillion-euro blunder the NSSO, which acts as the tax agent for the civil service, has been embroiled in this week.
Public Expenditure Minister Jack Chambers announced a review of the NSSO on Tuesday after revealing Cabinet ministers, past and present, will have to fork out as much as €30,000 after being overpaid in their pensions by the NSSO.
Sinn Féin’s Pearse Doherty said it raises “more serious questions” about the NSSO.
“The Government needs to explain how this level of error is even possible. This is basic accounting and payroll stuff.
“Ordinary workers, struggling with the cost-of-living crisis, will look at this with disbelief,’ he said.
Mr Doherty said there was “incompetent financial management at the heart of Government” and that “all recent scandals tie back to the Department of Public Expenditure”.
In the 2024 audit the C&AG reviewed the period from 2015 to 2023 and “uncovered 15 cases where the income tax deducted from the individual retirees was not paid from the Vote [NSSO]”.
Of the 21 cases where a chargeable excess tax liability has arisen to date, only six payments were made to the Revenue Commissioners.
“Weaknesses were identified in controls around the NSSO’s instruction process and Vote 12 oversight, which resulted in these payments not being processed and the error not being identified until now,” the C&AG wrote.
Vote 12 provides pension costs for civil servants.
The report notes the NSSO made an “unprompted voluntary disclosure” of €2.3m plus €468,000 in interest.
“A full review has been carried out with measures put in place to ensure Vote 12 is tax compliant.
“To note, all charge excess tax liabilities were correctly accounted for in determining the amount of pensionable benefits for the 21 retirees,” the C&AG wrote.
A spokesman for the Department of Public Expenditure said the issue is separate from the pension issue disclosed on Tuesday.
“The Department was aware of this separate issue which was dealt with last year.
“Such information has been published in the Appropriation Account 2023 which is publicly available,” he said.
The review announced by Mr Chambers covers over 13,000 current and former civil servants.
Current and former Government ministers were overpaid in their pensions, in some cases by up to €30,000, after a series of errors by the NSSO.
Mr Chambers branded the “serious and systemic operational issues” in the NSSO as “unacceptable” on Tuesday.
In one case, a senior civil servant was overpaid in their pension by €280,000, while current and former ministers have to repay amounts ranging from “hundreds of euros to the low €30,000s”.
Mr Chambers was alerted to the issues in March, after which further errors were discovered, including both underpayment and overpayment of pension entitlements dating back up to 20 years.
Some ministers were underpaid and are due refunds “from hundreds of euros up to the low €20,000s”.
The overall cost of the blunder is not yet known.
Mr Chambers said: “The NSSO has responsibility for the essential function of the provision of pay and pensions to public/civil servants and it has failed in this fundamental duty.
“I think there’s a piece of significant work required to restore trust and rebuild confidence.”
He added: “The NSSO is commencing a process to contact ministers to outline the issue to them and to make arrangements for the recoupment of monies owed or to issue refunds as appropriate.”
The Irish Daily Mail reported yesterday that senior members of Cabinet questioned how such serious errors could go undetected for so long.
