Feargal Quinn (Independent) | Oireachtas source

I move recommendation No. 5:

In page 27, to delete lines 18 to 38 and substitute the following:“ ‘Constituent University’ means a university specified in column 2 of the Second Schedule of the Universities Act 1997;
‘Trinity College’ means the College of the Holy and Undivided Trinity of Queen Elizabeth near Dublin established by charter dated the 3rd day of March, 1592, and shall be held to include the University of Dublin save where the context otherwise requires in accordance with the charters and letters patent relating to Trinity College;
‘the University of Dublin’ means the university established by the charters and letters patent incorporating Trinity College and which said university is further provided for by the letters patent of the 24th day of July, 1857;
‘Constituent University/Trinity College/the University of Dublin scheme’ means, as the case may be—

(I) the National University of Ireland, Galway (Closed) Pension Scheme 2010 (Joint Pension Scheme), or
(II) the National University of Ireland, Galway Pension Scheme 2005 (Model Scheme), or
(III) the University College Cork (Closed) Pension Scheme 2010 (Joint Pension Scheme), or
(IV) the University College Cork Pension Scheme 2005 (Model Scheme), or
(V) the University College Dublin (Closed) Pension Scheme 2010 (Joint Pension Scheme), or
(VI) the University College Dublin Pension Scheme 2005 (Model Scheme), or
(VII) the Trinity College or the University of Dublin (Closed) Pension Scheme 2010 (Joint Pension Scheme), or
(VIII) the Trinity College or the University of Dublin Pension Scheme 2005 (Model Scheme);

‘qualifying period’ means the period beginning on 1 July 2008 and ending on 31 December 2018;
‘relevant period’ means the period beginning on 14 July 2003 and ending on 30 June 2008;
‘relevant year’ means any year which falls wholly or partially within the relevant period;
‘specified employee’ means an individual who was a fixed-term employee of a Constituent University or Trinity College or the University of Dublin during the relevant period under a contract of employment which is governed by the Protection of Employees (Fixed-Term Work) Act 2003.
(ii) This paragraph applies to a contribution, which is not an ordinary annual contribution, paid or borne by a specified employee under the Constituent University/Trinity College/the University of Dublin scheme during the qualifying period in respect of a relevant year, other than such a contribution which is---”.

I welcome the Minister back to the House; we are keeping him busy today. In simplistic terms, pension schemes are generally established under trust, and the rules governing pension schemes can vary depending on the rules of the trust, but for them to be Revenue-approved schemes they must comply with certain conditions. One such fundamental condition is that membership of an occupational scheme must be confined to remunerated employees of the employers participating in that scheme. That is understandable, but employees in this context, including former employees as pensioners or employees with deferred pension entitlements, are also considered members of a scheme. It is not possible to pay contributions into a pension fund in respect of which one is not an active member - for instance, a current contributing member - and under the guidelines of the Revenue Commissioners, if this were to happen for any reason, tax relief would not be available on those contributions.
This particular issue arises from the implementation of the Protection of Employees (Fixed-Term Work) Act 2003. That Act conveyed pensionable rights on fixed-term workers in universities who hitherto did not have an entitlement to join university pension schemes, and although the fixed-term work Act was enacted in 2003, due to the complexities involved it was not implemented in the sector until 2008. The entitlement, however, applies effective from the date of implementation of the Act - that is, 2003. Individuals in question can retrospectively acquire that pensionable service for the period 2003 to 2008 by making the necessary contributions that should or would have been made at the time they were admitted to the pension schemes. It sounds very involved, but it is understandable when one gets down to it.
In general, this is straightforward. If the individuals in question are still employed by the university or in the wider public sector generally, with the same employer, and effectively the same pension scheme, the retrospective contributions can be made through the regular channels and tax relief is applied on those contributions as normal. However, if an individual has left the Irish public sector it becomes more complicated, as he or she is no longer employed by the Irish State, and therefore the Revenue Commissioners are now allowing tax relief on the contributions as they are being made to an occupational pension scheme in respect of which they are not currently members or active employees.
There is an additional issue in respect of the timeframe for claiming relief, which is limited to four years after the tax break in question. If the retrospective contributions were paid in 2008 or 2009, even if the issue of employment and payment to the scheme is addressed, they would now fall outside the timeframe until tax legislation is introduced under which a claim for relief could be made. I can understand how it happened, but I do not believe it was proposed.
The proposed recommendation to the Finance Bill is aimed at addressing that anomaly - we are talking about anomalies again on this occasion - to allow individuals who have left the public sector to obtain tax relief on the retrospective element of payment of contributions in respect of the period back to 2003, even where the payments were made longer than four years ago and therefore outside the time limit for claiming relief. This appears reasonable given that the payment of contributions is in respect of a period when the individuals were in employment, and had they been paid at the time they would have qualified for tax relief.
The potential cost to the Exchequer from this is likely to be small, as there is a limited cohort involved, and it appears that the only known cases in which this issue has arisen to date are in NUIG. That is not to say there may not be other cases in other universities, hence the proposal to broaden its application to other universities. The Minister can see that the recommendation lists practically all of the universities, because we do not know how many other instances may have occurred. However, we know of some in NUIG, and the reason we have included all the others in the list is simply to cover them. It is a very small cost to the Exchequer and we believe it is worthy of consideration.