Dáil Éireann Debate, Tuesday - 22 October 2013
129. Deputy Willie O'Dea asked the Minister for Finance the reason defined contribution pension holders are being charged a levy to pay for possible insolvent pension schemes from which they cannot benefit; his views on whether defined contribution pension holders should pay for potential State liabilities which may emerge from pre-existing or future pension fund difficulties; and if he will make a statement on the matter. [44650/13]
View answerThe revenues arising to the Exchequer from the stamp duty levy on pension fund assets are, in common with Exchequer revenues generally, not hypothecated to any particular item of expenditure or liability but have been used to help fund the various measures introduced by the Jobs Initiative. One of the very significant and successful measures introduced by the Jobs Initiative – the reduced VAT rate of 9% on tourism and certain other services – was due to end this year. In my Budget speech, I announced the continuation of the reduced 9% VAT rate and I indicated that the yield from the additional 0.15% pension fund levy in 2014 and the reduced levy of 0.15% in 2015 would continue to help fund the Jobs Initiative and also help to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties. In this context, for example, the cost of continuing with the reduced 9% VAT rate is estimated at €350 million in a full year while the additional yield from the changes to the levy in 2014 and 2015 is estimated at €135 million in each year. As I have indicated, the proceeds from the levy will accrue to the Exchequer and expenditure decisions on the use of those and other funds will be made as they arise in the normal way.
