Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I move amendment No. 5:

In page 27, to delete lines 8 to 26.

This is connected to the issue we discussed regarding the pensions. We thrashed this issue out on Committee Stage but I raise it again because we should sound alarm bells about what the Minister is doing regarding the approved minimum retirement fund and the requirement to have a pension income of €18,000, which the Minister is reducing to €12,700. That is not prudent. We spoke earlier about the pension reliefs. Sinn Féin is not arguing for the suspension of all pension reliefs, although some people might ask why we should give anybody relief to invest in pensions, but we recognise there is a pensions time bomb. The focus has gone off that because the country is like a time bomb, so to speak, and we need to stabilise its finances, but we also need to encourage people to invest in their pensions. However, the way the pension reliefs are structured, very few people benefit. The people who need to be incentivised to invest in pensions are not getting the benefit. We argued that pensions relief would be standardised. I acknowledge the Minister is considering introducing that next year and while I am disappointed it cannot be done this year, and bring in the additional tax, he must examine standardising pension reliefs.

The linkage I am making is that pension reliefs can incentivise people to put money in for the future. It is prudent that they do that for all the reasons that have been spelled out in numerous reports by successive Governments. Heretofore, a minimum retirement fund had to be established to the value of approximately €100,000. What the Minister is proposing in this legislation is to reduce that figure substantially from €119,000 to €63,000, and to reduce the minimum pension income from €18,000 to €12,700. As I explained earlier, someone on an old age pension currently gets approximately €12,000 and therefore their requirement to have that €700 extra put away is not good enough. It is not incentivising people.

The other issue is that in reducing the minimum retirement fund to the level the Minister is proposing, it will push the remainder of the funds into ARFs, which are taxable. Issues arise about that also. It is not prudent. I understand it is part and parcel of this policy to which the Minister is committed, but it is not prudent that we are reducing these thresholds to this level. I have raised that issue again in these amendments to send a signal that what the Minister is doing here is very dangerous. It is not sending out the right signals. He has said this caused a shock to the system in the past but as I said to the Minister earlier, he has not come forward with a sunset clause in this regard, therefore, if the Minister were to introduce it and increase it again in three years time, it will cause another shock to the system. I am very concerned about what the Minister is doing here on the issue of pensions into the future.

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