Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Excuse me. I apologise to the Dáil and to the Deputy in that regard. As he will be aware we operate a pension system where contributions and pension fund gains are exempt from income tax but income from pension drawdown is taxed. Where data is available in regard to the Exchequer cost of tax relief for pensions, it is publicly available and included in the Revenue Commissioners publication. With regard to distributional analysis I am advised by the Revenue Commissioners that prior to the introduction of real-time reporting on 1 January 2019 pension contributions were reported to the Revenue at an employer level rather than at an employee level. While there were some delays in the processing and publication of the 2019 data, it has been published. Analysis by the Revenue Commissioners of the 2019 figures indicates that pension deductions by employers and employees totalled €4.5 billion. These included contributions to occupational pensions, additional voluntary contributions, AVCs, contributions to personal retirement savings accounts, PRSAs, and contributions to retirement annuity contracts. On average, 775,000 people were making pension contributions every month through employer payrolls. This represented approximately 30% of all employees on average and more than 875,000 employees made pension contributions at some point in 2019. Those with higher incomes make greater contributions to their pensions but the average share of income set aside as pension contributions is relatively consistent across the income ranges and is typically 3% to 6%. However, more data is needed in this area. The pensions reform and taxation group, which reported in November 2020, is tasked with a number of actions related to the pensions roadmap, one of which is an assessment of the cost of State support for pension savings. That work is currently being done. The report notes that the tax treatment of pensions represents one of the largest Exchequer tax expenditures. However the exact cost of this is difficult to quantify due to the general nature of tax expenditures and specific pension-related challenges such as limited data availability and some features of the pension regime in Ireland. It is, therefore, challenging to capture the exact data needed to analyse comprehensively the varying types of pension relief. Having regard to the work that is under way as part of the task force group to consider how the data available on tax relief for pensions can be improved as well as the fact that more detailed information is now available following PAYE modernisation, I do not believe that a further report is needed. This work needs to be done and will be done but I do not believe that the amendment will play a role in it.

See this speech in context