Lynn Ruane (Independent) | Oireachtas source

I move recommendation No. 18:

In page 65, between lines 20 and 21, to insert the following:

“Report on private pension tax reliefs 39. The Minister shall, within six months of the passing of this Act, lay before both Houses of the Oireachtas a report on private pension tax relief including:

(a) an assessment of the cost to the exchequer;

(b) a comparative gender analysis of tax reliefs;

(c) the distributional impact; and

(d) the potential impacts or benefits of a shift from a marginal rate to a 30 per cent standard rate approach for private pension tax relief in respect of cost to the exchequer and gender impact.”.

Recommendation No. 18 touches on an issue we raise consistently in this House, namely, that of private pension tax relief. In recent years, there has been much discussion about the supposed unaffordability of our pension system. These discussions regularly fail to mention the approximately €2.9 billion annual spend on private pension tax relief. To put this in context, the Commission on Taxation and Welfare estimated that a universal pension at the same level for everybody in the State, including all women and men, would cost approximately €3 billion. More than 70% of the tax relief for private pensions accrues to the top 20% of earners. Therefore, we are spending a huge amount of money each year on a trickle-up policy, all the while claiming that a universal pension - and even our current pension system - is somehow unaffordable.

All this has taken place in the context where there is a concerted effort to make our pension system more exclusionary and less secure. Plans have been announced by the Government to introduce a tiered pension system whereby only those who work until 70 years of age will be able to access the highest payments, effectively condemning certain types of workers to real-term cuts in pension payments for years to come. It goes without saying that this system would punish manual labourers, nurses, hospitality workers, front-line workers and all those in the kinds of jobs that take the highest toll on a person's body. They simply cannot keep working until they are 70 years of age.

On the issue of when contributions move from ten to 20 years, women in particular found themselves on a reduced rate of pension. If we move to 30 years, we are likely to see even more women on a reduced rate. If we go to 40 years, you can be guaranteed that an extraordinary number of workers in this State will not have 40 years' worth of contributions. Let us bear in mind that only 20 years can be from a combination of PRSI credits while on a social protection payment or caring credits.

What we have from the Government can only be described as some form of collective cognitive dissonance, because, on the one hand, workers are being told the State cannot afford their pensions into the future and that it would be somehow unthinkable for us to spend €3 billion annually on a universal pension. On the other hand, we spend €2.9 billion per year on a policy that disproportionately benefits the highest earners in society. Recommendation No. 18 calls for a detailed report on private pension tax relief, specifically with regard to gender and distributional impact.