Tax relief on individual pension contributions is allowed at the taxpayer's marginal tax rate, that is, at the standard or higher rate as appropriate in each case. It is assumed that the change mentioned by the Deputy is to provide tax relief at the top rate of tax for all pension contributions by individuals, including those currently relieved at the standard rate.
It is not possible to provide an estimate in respect of employee and employer contributions to occupational pensions because the relevant data on contributions is not captured in such a way as to provide a dedicated basis for compiling this information. Tax relief for pension contributions by employees is normally given by way of a deduction from total income in arriving at income for tax purposes, that is, the income for tax purposes of employees is net of their pension contributions, the "net pay" arrangement. The employer's contributions are an allowable deduction from profits and are not specifically recorded in Revenue Commissioners statistics.
Provisions were included in the Finance Act 2004 requiring employers to provide data on superannuation contributions in the P35 form to be filled by employers in February 2006. Preliminary information should become available in mid-2006, bearing in mind the Revenue Commissioners have to carry out a programme to check the quality, consistency and accuracy of the returns. These changes will yield additional information regarding the overall cost of tax relief for pension contributions but as the returns will be aggregated at employer level they will not provide a precise basis for measuring the potential impact on the Exchequer of proposals for changes at individual level.
As regards the self employed and certain employees in pensionable employment, there are data available relating to relief on contributions for retirement annuity contracts, RACs, for the short tax year 2001. RACs are subject to a current contribution cap of €254,000. On that basis the full year cost to the Exchequer, adjusted for a 12 month year, of the change mentioned is tentatively estimated at approximately €23 million but could be considerably higher if the change resulted in new pension contributors claiming the relief.