Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

This is the one resolution I expect every Member of the House to support. I cannot see why anybody would oppose it. It deals with people getting what we would all call massive redundancy payments on a voluntary basis excluding the statutory payment. So where somebody, having been in an organisation for 20 or 30 years, gets €30,000 or €40,000 statutory redundancy, if he or she gets in excess of €200,000 on top of that there was an arrangement in place called top-slicing relief - I thank the officials for clarifying it to me. In the normal course of events if one got that amount of income in a year, one would have paid tax at one's top marginal rate. A special provision was introduced allowing the person to pay the average of his or her effective rate for the previous three years. So if people had extra allowances and were not quite at the top rate, they brought it down to their effective rate which was always going to be lower than the top marginal rate. They might end up only paying tax on the excess over €200,000 at considerably less than the 41% - they might be getting it at 30% or somewhere in that region.

It is only right that this little provision should be changed and those people who get non-statutory lump sums above that amount should pay tax at the top rate. I believe everybody would agree with that and I urge all sides to support it because I do not believe anybody could countenance in this day and age that we would continue to have a provision giving special tax concessions to those who are walking out with non-statutory lump sums of more than €200,000.

I will make one small political point to the Tánaiste. This sounds like something the Labour Party might have been keen to have included as it is seen as getting somebody at the top. However, the projected yield for 2013 is nil. It is a fig leaf to give the impression we are doing something. There is no money in this and I do not know of anybody who is getting payments of €200,000 over and above statutory redundancy. Those days are long gone. There is a projection that it might raise some money in future years. The officials may be taking the prudent view because they could not estimate accurately. By inserting "nil" if we end up getting something, it will be a bonus. I do not believe it will yield much money but the principle of the financial resolution is absolutely correct and everyone in the House should support it.

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