Tuesday, 21 May 2019

Questions (194, 195, 196, 197, 198)

Pearse Doherty

Question:

194. Deputy Pearse Doherty asked the Minister for Finance the estimated savings that would be made by reducing the maximum tax relief available on private pension contributions to percentage rates (details supplied). [21951/19]

View answer

Pearse Doherty

Question:

195. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by reducing the earnings cap for pension contributions from €115,000 to €70,000, €65,000 and €60,000, respectively. [21952/19]

View answer

Pearse Doherty

Question:

196. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised from reducing the standard fund threshold from €2 million to €1.3, €1.5 and €1.7 million, respectively. [21953/19]

View answer

Pearse Doherty

Question:

197. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by reducing the tax free lump sum retirement limit from €200,000 to levels (details supplied). [21954/19]

View answer

Pearse Doherty

Question:

198. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by reducing the earnings cap for pension contributions from €115,000 to €60,000. [21955/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 194 to 198, inclusive, together.

Regarding Questions 21951/19, 21952/19 and 21955/19, I am advised by Revenue that the Ready Reckoner, available at link www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx, shows, on page 11, the estimated cost or yield from changing combinations of (i) the maximum tax relief available on private pension contributions or (ii) the ceiling on the annual earnings limit for determining maximum allowable contributions for pension purposes.

  While not all of the scenarios requested by the Deputy are shown in the Ready Reckoner, the others can be calculated on a straight-line or pro-rata basis from the information provided as follows:

Max rate of tax relief on private pension contributions

Full Year yield €m

35%

80

32%

126

30%

159

28%

191

25%

239

22%

287

20%

319

Annual Earning Cap for pensions contributions

Full Year yield €m

€70,000

100

€65,000

116

€60,000

134

Regarding Question 21953/19, the Standard Fund Threshold is the maximum allowable pension fund on retirement for tax purposes, which was introduced in Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. Information on the numbers and values of individual pension funds or on individual accrued benefits in pension schemes are not generally required to be supplied to Revenue. Therefore, there is no readily available underlying data or methodology on which to base reliable estimates of any possible yield which might be realised from the reductions in the Standard Fund Threshold outlined by the Deputy.

Regarding Question 21954/19, I am advised by Revenue that as there is no requirement to include data in tax returns in relation to tax free lumps of less than €200,000 (the current life-time limit on tax-free retirement lump sums), it is not possible to quantify reliably the estimated yield for the Exchequer from the reductions of the tax free lump sum entitlement set out by the Deputy.