Dáil Éireann Debate, Friday - 7 September 2018
1264. Deputy Michael McGrath asked the Minister for Employment Affairs and Social Protection if a person will still qualify for tax relief on the contributions they have invested through the auto-enrolment scheme under the strawman proposal; and if she will make a statement on the matter. [36289/18]
View answerThe Government recently published a 'Strawman' proposal for an Automatic Enrolment (AE) system for Ireland. This document has been drafted to underpin a consultation process, to help improve the decisions that need to made in terms of the operational structure and design of AE for Ireland. However, the Strawman should not, in any way, be construed as a confirmation of what form AE will ultimately take or as a document that is intending to provide ‘all of the answers’. It is a high level draft intended to generate and prompt discussion and improve ideas.
In the Roadmap for Pensions Reform 2018-2023, the Government confirmed that under an AE system, the State will support employees by financially incentivising retirement saving. Moreover, the Government believes that any financial incentive for AE should be effectively communicated, easily understood and appreciated. For the purpose of the Strawman, the State’s incentive for people to participate in the system is presented as a contribution worth €1 for every €3 that the employee contributes towards their retirement savings account. Under the Strawman proposals, any AE contributions made by the State will replace, rather than augment, existing tax reliefs.
The Strawman makes clear the value and the mechanism for providing this incentive will only be finalised following the public consultation. The Strawman also refers to a separate review of the cost of funded supplementary pensions to the Exchequer, which is currently being carried out by the Interdepartmental Pensions Reform and Taxation Group, chaired by the Department of Finance. The outcomes of these processes, together with further detailed analysis and evidence building, will inform future Government decisions relating to the level of financial incentive for AE and the most appropriate manner in which this incentive should be delivered.
I hope this clarifies the matter for the Deputy.
