Clare Daly
Question:98. Deputy Clare Daly asked the Minister for Finance if he is honouring the commitment that the pension levy would not be extended beyond 2014. [31324/13]
View answerThursday, 27 June 2013
Questions (98, 99)
Clare Daly
Question:99. Deputy Clare Daly asked the Minister for Finance the reason lower-paid workers were not excluded from the pension levy, in line with the method used for the PRD in the public service. [31326/13]
View answerWritten answers
I propose to take Questions Nos. 98 and 99 together.
In my Budget 2013 speech, I made a point of confirming that the pension fund levy introduced as part of the Jobs Initiative will not be renewed after 2014.
The pension fund levy introduced in 2011 and the public service Pension-Related Deduction (PRD) introduced in 2009 are two entirely different charges which apply in different ways.
The PRD is an income-graduated imposition on the pay of pensionable public servants. It is imposed in such a way that increasing rates of deduction are applied to increasing bands or slices of an affected public servant’s pay each year. The PRD originally became operative on 1 March 2009 as provided for in section 2 of the Financial Emergency Measures in the Public Interest Act 2009. Soon afterwards, the PRD rates and bands were changed by section 13 of the Social Welfare and Pensions Act 2009, which, in particular, put in place a zero per cent rate of PRD, effectively an exemption, on the first €15,000 of pay in each year. A further change in PRD will take place on 1 January 2014, when the PRD rate on the €15,000 to €20,000 band will fall from 5% to 2.5%, as provided for in section 11 of the Financial Emergency Measures in the Public Interest Act 2013.
Members of pension schemes affected by the 2011 pension fund levy, on the other hand, are not charged with paying the 0.6% stamp duty levy on pension fund assets. The levy is a charge on the trustees of pension schemes and on the insurers and administrators who manage the assets of pension schemes and it is they who are liable to pay the levy. It is up to those trustees and administrators to decide in each case whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension funds or pension plans for which they are responsible. I have no general information on the decisions taken by trustees and administrators in this regard.