The Irish government will oppose any changes to pension contributions in pay talks with unions, ahead of elections, according to the Sunday Independent.

The newspaper reported that the Finance Minister Paschal Donohoe intends to ‘face down’ any union demands that involve abolishing the pension levy, as he believes it will be a key issue on pay ahead of the next election.

The levy was imposed after the financial crash as an emergency measure and has had public sector workers pay around 5 per cent of salary since 2009. The levy has since been converted into a contribution toward public sector pensions, worth around €2,500.

The Public Sector Pay Commission has recommended keeping the levy to address a further deepening hole in the state's pension pot, while workers in the public sector have seen significant pay increases over the past three years and will see their salaries rise against next year.

Speaking to the Sunday Independent, a senior government source said the unions would "not win that argument" and would face huge resistance from the Department of Finance if they sought to have the levy abolished.

"That is where they are going to fight the pre-election phase and I know how we are going to be handling that," the source told the newspaper.

"You simply cannot say you are going to get rid of that pension contribution when two-thirds of private sector workers don't have a pension."

In the past weeks, several unions have called for ministers such as Education Minister Joe McHugh, to address pay, with the Association of Secondary Teachers calling for a mid-term examination of public sector salary agreements as new entrants are paid less than existing teachers.

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