Dáil Éireann Debate, Tuesday - 7 October 2014
188. Deputy Michael McGrath asked the Minister for Finance if he will provide, in tabular form, the revenue that would be raised from reducing the annual earnings limit along with age-related percentage limits for maximum tax relievable contributions for pension purposes from €115,000 to €100,000, €90,000, €80,000, €70,000 and €60,000, respectively, if tax relief is granted at the marginal rate; and if he will make a statement on the matter. [38174/14]
Amharc ar fhreagraI assume that the Deputy is referring to the current annual earnings cap of €115,000, which operates to limit the level of tax-relieved personal pension contributions in any one year. The annual earnings cap acts, in conjunction with age-related percentage limits of annual earnings, to put a ceiling on the annual amount of tax relief an individual taxpayer can obtain on pension contributions.
A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available as tax returns by employers of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. There is, therefore, only a limited statistical basis for providing definitive figures.
However, by making certain assumptions using the available information, the Revenue Commissioners advise me that the impact on yield to the Exchequer may be tentatively estimated in respect of reducing the current annual earnings cap in respect of individual contributions to occupational pension schemes, RACs and PRSAs. Such estimates take no account of any behavioural impacts that may arise from the proposed changes and that could effect the scale of any yield.
On this basis, and based on the latest available information, it is tentatively estimated that the yield from the reduction of the annual earnings cap for pension contributions from €115,000 as suggested by the Deputy is set out in the following Table.
|
Revised Ceiling |
Estimated Yield |
|
€100,000 |
€28m |
|
€90,000 |
€52m |
|
€80,000 |
€78m |
|
€70,000 |
€110m |
|
€60,000 |
€149m |
