As part of my reforms in the pensions area and with the aim of encouraging more people to increase their pension coverage, I increased the contribution limits for retirement annuity contracts in section 19 of the 1999 Finance Act for the tax years 1999/2000 and onwards. The new limits ranged from 15% of net relevant earnings for contributors up to 30 years of age to 30% of net relevant earnings for contributors over 50 years of age. Prior to this, the limit was 15% for persons up to the age 55 and 20% for those aged 55 or over. The increase was particularly significant for those over the age of 50, who would normally be in a much better position to fully fund their pensions than those in younger age groups who might not be able to contribute as much as they would like due to other family and financial commitments. At the same time, I also imposed an annual contribution earnings cap of £200,000 which is now €254,000. There had been no such earnings cap prior to this and the cap has not been increased since 1999.
Similar contribution limits and an earnings cap also apply in the case of the new PRSAs which were introduced by the Pensions Amendment Act 2002.
I provided for the same higher limits for employee contributions to occupational pension schemes in section 10 of the 2002 Finance Act. The limits in these schemes are subject to the same annual earnings cap of €254,000 and contributions have also to be in conformity with the overall existing maximum pensions benefit rules applied by the Revenue Commissioners.
I am informed by the Revenue Commissioners that the only relevant information available is in respect of income tax relief allowed for contributions to retirement annuity contracts for the income tax year 2000/01, which is available to the self-employed and to employees not in occupational pension schemes.
The information is contained in the following table. Corresponding information is not available in respect of contributions to occupational pension schemes.
Income Tax 2000-2001
Retirement Annuity — by range of Gross Income
|
Range of Gross Income
|
Totals
|
From
|
To
|
Number of claimants
|
Amount of deduction
|
Reduction in tax
|
€
|
€
|
|
€
|
€
|
—
|
7,000
|
1,177
|
1,955,819
|
78,893
|
7,000
|
8,000
|
445
|
460,313
|
58,009
|
8,000
|
9,000
|
482
|
517,362
|
72,595
|
9,000
|
10,000
|
605
|
677,315
|
104,375
|
10,000
|
12,500
|
2,085
|
2,556,593
|
414,447
|
12,500
|
15,000
|
3,018
|
4,048,740
|
716,147
|
15,000
|
17,500
|
3,748
|
5,251,284
|
995,191
|
17,500
|
20,000
|
4,534
|
6,702,992
|
1,383,079
|
20,000
|
22,500
|
5,039
|
7,913,913
|
1,827,405
|
22,500
|
25,000
|
5,170
|
8,673,220
|
2,401,776
|
25,000
|
27,500
|
5,222
|
9,570,368
|
2,885,250
|
27,500
|
30,000
|
4,802
|
9,484,550
|
2,925,870
|
30,000
|
32,500
|
4,656
|
9,943,080
|
3,055,705
|
32,500
|
35,000
|
4,263
|
9,537,566
|
2,926,141
|
35,000
|
37,500
|
4,130
|
9,663,805
|
2,903,120
|
37,500
|
40,000
|
3,933
|
10,038,129
|
3,257,816
|
40,000
|
42,500
|
3,631
|
9,501,707
|
3,293,735
|
42,500
|
45,000
|
3,435
|
9,713,142
|
3,530,458
|
45,000
|
47,500
|
3,086
|
9,011,157
|
3,504,334
|
47,500
|
50,000
|
2,914
|
9,281,690
|
3,636,036
|
50,000
|
60,000
|
9,270
|
35,138,405
|
14,619,369
|
60,000
|
75,000
|
8,409
|
43,294,064
|
18,686,681
|
75,000
|
100,000
|
6,608
|
50,258,905
|
21,959,343
|
Over
100,000
|
11,041
|
250,248,583
|
109,779,797
|
Totals
|
101,703
|
513,442,702
|
205,015,573
|