Trade unions representing workers in the private sector are to seek basic pay increases of just over 3 per cent next year and to look for additional payments to compensate for rising housing and childcare costs.

The private sector committee of the Irish Congress of Trade Unions (Ictu) is expected to advise affiliated unions on Thursday to look for increases of 3.1 per cent in negotiations with employers to take account of regular productivity and cost of living issues.

In addition, unions will also be urged where appropriate to seek further increases through collective bargaining to take account of the rising costs of housing, childcare and pensions.

Meanwhile, it has emerged the Government has ruled out increasing the value of allowances paid to public service staff in line with increases to come into effect in 2018.

Ictu warned the Government before the budget in October that employers would face pay claims to compensate for soaring accommodation costs unless there is an immediate policy shift by Government to tackle the housing crisis.

It argued that rent now accounted for 27 per cent of workers’ disposable income and this was severely impacting on living standards.

Retirement issues

Unions also maintained that Irish workers had the second-highest childcare costs in the OECD and that workers also had to save more if they were to generate a reasonable living in their retirement.

Increases along the lines proposed by the private sector committee of Ictu would, if secured, be higher than those that will be paid to staff in the public service next year.

Under a deal negotiated between the public service trade union movement and the Government earlier this year, and backed by ballots of most individual unions, staff in the public service will receive a 1 per cent increase in January 2018 to be followed by a further 1 per cent in October next year.

Meanwhile the Department of Public Expenditure and Reform has stated that the value of fixed allowances paid to public service personnel will not be increased next year in line with the pay rises under the deal.

These allowances were cut by between 5 and 8 per cent in 2010 by the then government as part of measures to deal with the economic crisis.

Value of allowances

It is understood that public service union leaders at a recent meeting with Minister for Finance and Public Expenditure Paschal Donohoe had argued the value of these allowances was traditionally linked to pay rises. It is understood the Department of Public Expenditure contended that allowances had been cut independently of pay reductions applied at the time. It argued that under the new public service pay deal, the value of allowances would be restored in October 2020.

Minister for Finance Paschal Donohoe: department says value of fixed allowances paid to public service personnel will not be increased next year in line with the pay rises under the deal. Photograph Nick Bradshaw

The department said on Wednesday the Minster had been clear to unions there was “no scope to deal with the matter in 2018”.

“In acknowledgment of the nature of the issue that had arisen, the Minister indicated the procedures under the agreement should be utilised to have the matter discussed further ,” the department stated.