Dáil Éireann Debate, Tuesday - 4 December 2012
153. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer by reducing the pension related earnings cap to €70,000 and reducing the marginal rate of tax relief for private pensions to 30%. [54084/12]
View answerI assume that the Deputy is referring to the current annual earnings cap of €115,000 which operates to limit the level of tax-relieved personal pension contributions in any one year. The annual earnings cap acts, in conjunction with age-related percentage limits of annual earnings, to put a ceiling on the annual amount of tax relief an individual taxpayer can obtain on pension contributions. 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. There is, therefore, only a limited statistical basis for providing definitive figures. However, by making certain assumptions about the available information, the Revenue Commissioners inform me that the combined estimated full year yield to the Exchequer from reducing the current annual earnings cap of €115,000 to €70,000 and confining tax relief to the standard rate of 30% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €330 million.
