I assume the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer's marginal tax rate — 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 and personal retirement savings accounts — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers.
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, retirement annuity contracts and personal retirement savings accounts would be approximately €470 million.
The estimated full-year yield to the Exchequer from confining tax relief to a rate of 33% for individuals who can obtain relief at the 41% rate in respect of individual contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts would be approximately €180 million. It is assumed that tax relief at the flat rate of 33% would not be available to claimants who are currently confined to tax relief at the standard rate of 20%.
These estimates do not allow for possible behavioural changes that could arise from changes in the rates of relief.