Alice-Mary Higgins (Independent) | Oireachtas source

I believe that this recommendation is one of the most important in the Bill. It asks the Minister to consider creating a report for the Oireachtas looking at how an amendment within Part 30 of the principal Act might be made for the replacement of the current marginal rate tax relief for private pensions with a standard rate tax relief. The recommendation also proposes an alternative to allow for a replacement of the current marginal rate tax relief with a single rate tax relief of 30%. The inequity around private pension tax relief is an issue. Greater relief goes to those on the highest incomes and less relief goes to those on lower incomes, even though the stated objectives of the pension policy are to encourage a wider take-up of pensions and to encourage a greater gender equality in more women taking up pensions. Both of these measures are counteracted by the marginal rate tax relief in which the benefits go very heavily to higher earners. In the memorandum of understanding with the troika, one of the key measures it had sought at that time was the standardisation of Ireland's private pension tax relief. This was one of the only measures that was not implemented or touched, even though it had been a key recommendation. It was recommended as an inequity. I have the Minister of State's figures here. We have an inequitable tax relief system with varying costs. Dr. Micheál Collins, assistant professor of social policy in UCD has looked at figures overall for tax relief for private pensions being estimated at €2 billion. We are aware that the figure for certain schemes alone is €210 million. We are talking about a huge figure - hundreds of millions of euro - being spent on private pension tax relief in Ireland.At the same time, we have been hearing that addressing the inequalities in our State contributory pension system is simply unaffordable. We have a recognised inequality in tax relief being maintained instead of addressing a recognised inequality in our contributory pension system.