I assume that the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer's marginal tax rate, that is, at the standard or higher rate of income tax as appropriate in each case.
A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. The latest full historical data available in this regard is in respect of the tax year 2007.
There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €500 million.
I assume that the ESRI Report referred to by the Deputy is that entitled Pension Policy: New Evidence on Key Issues published in November last. The Report deals mainly with the question of whether existing tax incentives for private pension provision would be better targeted to encourage improved coverage by allowing relief on contributions at the standard income tax rate or at a hybrid rate of 30% rate. While apparently seeing merit in both approaches, the Report favours tax relief on pension contributions at the standard income tax rate in conjunction with sustaining the State Pension and schemes to increase pension coverage among lower to middle income earners.
The recently published Renewed Programme for Government includes a commitment to introduce a single 33% rate for tax relief on private pension provision in the context of the National Pensions Framework. This would result in a reduction in the tax relief on pension contributions available to higher rate taxpayers and an additional incentive to pension savings for standard rate taxpayers. However, the full detail and timing of the introduction of this measure have yet to be decided. I will bear the ESRI Report in mind in the context of delivering on the Government's commitment in this area.