(09 August, 2016)
“Variation on the take-home pay of Civil Servants”
- The Ministry of Finance and National Planning (MFNP) would like to inform the Public that the Remuneration Authority’s (RA) work conducted in relation to the salary structure of the Government has been completed and implemented on 1st July 2016. The implementation of the new salary structure is the result of collaborative efforts between Government Ministries, Departments and Agencies (MDAs) and the RA to address the shortfalls of the old structure that has been in place for more than 20 years.
- The two RA reports produced were both effective on the same day using same evaluation methodology covering ministries that are under the Public Services Act and those outside namely; Police, Fire, Prisons, Magistrates, Public Enterprises and the Legislative Assembly to name a few.
- Throughout the production process of the report, the RA and Public Service Commission (PSC) conducted extensive consultations with all MDAs on Tongatapu and their branches in the outer islands. During these consultations a range of remuneration, employment and human resource management concerns were raised in relation to the job evaluation process, the banding and comparability/relativity, and existing policy. These concerns have been addressed in the approved RA report 1 and 2. The appeal process has also started for those who deemed their concerns have still not been properly addressed. The RA and PSC continue to work incessantly to ensure the smooth implementation of the new salary structure.
- With the new salary structure being implemented, the take-home pay for some civil servants have been conveyed to the MFNP is experiencing some reductions ranging from TOP$1 to TOP$10. This has caused some misunderstanding that the approved new salary structure has caused this reduction. The MFNP wishes to inform the public that the approved new salary structure is not related to what is being conveyed as a salary reduction. The Ministry has revisited the computation used in the micro-pay system in order to verify the reduction raised and confirmed that those staff reported be affected had misunderstood the way the salary computation was conducted. It is important to have a better understanding of the salary computation used for the government’s salary which is presented below:
The new basic salary for 2016/17 is inclusive of the 5% COLA approved in December 2015 which increases the base-salary resulting in the increase of the 5% retirement super member contribution deduction.
b) The 5% Super Member Contribution is based only on the member’s annual (basic) salary applicable in the month of July, despite any increase in the annual (basic) salary during the year such as increments. The 5% Super Member Contribution is fixed on the original amount (effective from 1st July) until the next review date, which is the 1st of July in the new financial year. As a result, the 5% Super Member Contribution amount will increase resulting in a reduction of the NET PAY deposit to the designated bank accounts.
- Public may have heard of the misinformation being circulated that the payment of the salary for public servants for the last-pay of the last financial year ( 2015/2016) on the 2nd of June, 2016 were incorrect as it did not cover the remaining 8 days period of the financial year. This is utterly wrong because the salary is paid-out in advance as per the payment scheduled provided in the beginning of the financial year. Therefore, the pay being received on the 22nd of June 2016 by all civil servants cover the 8 days of the final pay (26th last pay as per the payment scheduled) period up to the 30th June, 2016.
- The MFNP wishes to reassure all those paid from government that the salary and wages are accurately computed according to the approved entitlements and is committed to providing reliable and timely payment of salaries and wages for all government civil servants.
- The MFNP is happy to clarify should any further concerns arise pertaining to salary reductions and urge those affected to contact to the Ministry.
Ministry of Finance and National Planning, 8 August 2016.
Issued by the: Ministry of Finance and National Planning