Dáil Éireann Debate, Tuesday - 30 June 2020
64. Deputy Seán Haughey asked the Minister for Finance if consideration will be given to allowing the unlocking of private pension funds for the duration of the Covid-19 pandemic in the case of unemployed PAYE taxpayers; if tax would have to be paid on such funds; and if he will make a statement on the matter. [13384/20]
Amharc ar fhreagraIn relation to the Deputy’s proposal to allow people access a portion of their pension fund before retirement, 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 monitored on a continuous basis, I do not have any plan 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 those who have suffered a loss of income arising from the COVID-19 crisis. This includes the Temporary Wage Subsidy Scheme (TWSS), the Pandemic Unemployment Payment and bank-related forbearance measures.
I am advised by Revenue that, as of 25 June 2020, over 552,200 employees had received a subsidy since the start of the Temporary Wage Subsidy Scheme (TWSS), 247,300 employees had received a subsidy in the previous week and an estimated 405,000 employees were being supported by the scheme having received a subsidy in their most recent pay period.
Revenue further advises that it regularly publishes statistics in relation to the TWSS. The most recent update can be found at the following link:
https://www.revenue.ie/en/corporate/documents/statistics/registrations/wage-subsidy-scheme-statistics-25-june-2020.pdf
Data from the Department of Employment Affairs & Social Protection showed there were 465,900 people in receipt of a Pandemic Unemployment Payment on 22 June 2020. A total of 693,800 people had received at least one payment since the scheme started. The data are available at the link:
https://www.gov.ie/pdf/?file=https://assets.gov.ie/77508/12053c11-e227-4a26-af6d-355c5f240b17.pdf#page=null
