Dr. Barra Roantree:

Indeed. Again, for the €200,000 limit on the tax-free lump sum to be binding, one needs a very generous defined benefit pension based on a high salary. Most such cases would involve high-paid public sector jobs by virtue of who has a defined benefit pension and who does not and by virtue of the fact that one needs substantial accruals to get a very large lump sum. Otherwise, you need a defined contribution pension pot amounting to hundreds of thousands. Very few individuals are in that position. We are talking about the top of the distribution. While I am sure that, as Deputy Durkan says, there are cases in which these people have borrowed on that basis, we are talking about a substantial tax expenditure. It was in excess of €100 million in 2014, the most recent year for which we have figures available, and I imagine it is substantially in excess of that figure now, given increases in pay, pensions and equity since then.

What Deputy Durkan says does not mean that, because something has been set, we can never change it again. As I have said throughout this session, however, he raises an important point about the importance of stability in the pensions tax system in that we should not be chopping and changing from year to year, that we should have an overarching strategy and a view of how that system works, and that we should try to stick to that insofar as possible. I do not accept, however, that the people who would be excepted from reducing that tax-free lump sum, even from €200,000 to €100,000, could not be considered well off. These are people with very substantial pension pots or very generous defined benefit pensions. That is important to bear in mind when we talk about these things. We are not talking about people who are at or near the poverty line. That is where the welfare system comes in. In part, these things are related. We are talking about ways to ensure we have money to pay for the State pension in the future. From that point of view it is important to be clear about who we are talking about being affected by these types of measures.