Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Deputy has raised the importance of policies designed to support individuals in retirement. As both career paths and the shape of life after retirement change, Government policies need to continue to align with the needs of retirees. Pensions have their own special treatment within the tax system to encourage these preparations. Ireland operates an exempt-exempt-taxed system. Contributions to pensions, within certain limits, are exempted from income tax, pension fund gains are exempted from income tax and income from pension drawdown, other than a tax-free lump sum, is taxed. This is intended to encourage individuals to save appropriately for retirement.

As the Deputy will be aware, the Government remains fully committed to supporting and protecting the most vulnerable in society through both tax and expenditure measures. The income tax system contains a number of provisions that have been introduced to provide additional supports to family carers, such as the home carer tax credit, the incapacitated child tax credit and the dependent relative tax credit. Those over 65 are treated in a more favourable manner by the income tax system. There is also relief from capital gains tax for transactions involving individuals' homes. These existing supports should facilitate many of the concepts the Deputy referred to.

In this context, it is important to consider whether the tax system is the appropriate vehicle for further supports for retirement income. Taxation is only one of the levers available to the Government and, generally, the presumption should be that non-tax measures should be considered before the use of a tax-based measure. I reiterate, however, that the Government remains committed to taking appropriate action to support retirees where required. If the Deputy has any suggestions or policy proposals, I will be more than happy to engage with him and to have them looked at in detail.

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