Carol Nolan
Question:62. Deputy Carol Nolan asked the Minister for Finance if he will provide clarification on a pensions-related issue (details supplied); and if he will make a statement on the matter. [32195/20]
View answerThursday, 22 October 2020
Questions (62)
Written answers
The long established policy of providing tax relief for pension contributions is to encourage saving by employers, employees and the self-employed towards their retirement income. A repayment of contributions is only permitted in highly limited circumstances, for example due to ill-health, and as such, this would be subject to income tax.
The policy rationale underpinning this is that the State provides generous tax relief on both pension contributions and fund growth to ensure that people have sufficient savings to fund their regular costs and expenses during their retirement. However, on actual drawdown, a pension is subject to tax at the individual’s marginal tax rate. In the event of any early encashment of a pension fund, the tax relief received must be clawed back. It should also be noted that any refund of pension contributions is governed by the terms of the specific scheme or product.
As is the case with all matters of policy, while they are kept under review on a continuous basis I do not have any plans at this time to revise these pension arrangements.
It is important to point out that a very significant and comprehensive package of measures has already been put in place to assist individuals and businesses impacted by the COVID-19 pandemic. This includes the Employment Wage Subsidy Scheme (EWSS), the Pandemic Unemployment Payment (PUP), bank-related forbearance measures, and various other Government supports that were announced in the July Stimulus Package and in Budget 2021, such as the Re-Start Grants, Credit Guarantee Scheme, Covid Restrictions Support Scheme (CRSS) and the VAT reduction from 13.5% to 9%.