Written answers
Thursday, 19 October 2006
Department of Finance
Pension Provisions
5:00 pm
Richard Bruton (Dublin North Central, Fine Gael)
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Question 155: To ask the Minister for Finance when full analysis of the distribution across the various income levels of pension contributions will be available; and the analysis interim otherwise available to date on same. [33809/06]
Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that the only relevant information available is in respect of income tax relief allowed for contributions to "Retirement Annuity Contracts" for the income tax year 2003, which are available to the self-employed and to employees not in occupational pension schemes. A distribution by income ranges of the number of cases, amount of deduction and reduction in tax for tax relief for Retirement Annuity Contracts is contained in the table that follows this reply. The information is based on income returns on Revenue records at the time the data were compiled for analytical purposes, representing about 98% of all returns expected. It is not possible to provide corresponding figures in regard to the take-up of the tax relief for pension contributions by employers and employees as the relevant data are not captured in such a way as to make this possible. A married couple who has elected or has deemed to have elected for joint assessment is counted as one tax unit. Provisions were included in Finance Act 2004 with a view to improving data quality and transparency without overburdening taxpayers or employers. The Act includes provisions that require employers to provide data on superannuation contributions in the P35 form to be filed by employers in February 2006. These changes will yield additional information regarding the overall cost of tax relief for pension contributions but as the returns will be aggregated at employer level they will not provide a precise basis for measuring the potential impact on the Exchequer of proposals for changes at individual level. Work on developing the necessary technical enhancements to the Revenue computer system to enable this data to be captured is ongoing.
| Range of gross income | Number of cases | Amount of deduction | Reduction in tax | Gross Tax* | Reduction in tax as % of Gross Tax % |
| € | € | € | € | % | |
| 0 – 9,000 | 1,311 | 2,258,341 | 141,112 | 1,220,083 | 11.6 |
| 9,000 – 10,000 | 396 | 520,767 | 56,739 | 145,733 | 38.9 |
| 10,000 – 12,000 | 960 | 1,390,966 | 182,028 | 325,681 | 55.9 |
| 12,000 – 15,000 | 2,117 | 3,294,103 | 476,424 | 1,123,382 | 42.4 |
| 15,000 – 17,000 | 1,839 | 2,916,457 | 440,441 | 1,433,123 | 30.7 |
| 17,000 – 20,000 | 3,562 | 5,982,637 | 1,057,797 | 3,925,339 | 26.9 |
| 20,000 – 25,000 | 7,437 | 13,264,657 | 2,509,060 | 11,424,694 | 22.0 |
| 25,000 – 27,000 | 3,456 | 6,636,168 | 1,288,242 | 6,761,114 | 19.1 |
| 27,000 – 30,000 | 5,185 | 10,416,281 | 2,236,258 | 12,281,820 | 18.2 |
| 30,000 – 35,000 | 8,760 | 19,577,391 | 5,322,680 | 28,319,511 | 18.8 |
| 35,000 – 40,000 | 8,310 | 21,125,491 | 6,176,678 | 35,540,978 | 17.4 |
| 40,000 – 50,000 | 14,146 | 42,851,406 | 13,602,269 | 83,706,273 | 16.2 |
| 50,000 – 60,000 | 11,495 | 43,082,859 | 13,969,983 | 95,014,387 | 14.7 |
| 60,000 – 75,000 | 11,870 | 57,063,627 | 21,767,071 | 139,128,001 | 15.6 |
| 75,000 – 100,000 | 9,855 | 69,066,748 | 28,384,806 | 179,694,549 | 15.8 |
| 100,000 – 150,000 | 7,164 | 90,203,134 | 37,714,062 | 221,977,076 | 17.0 |
| 150,000 – 200,000 | 2,978 | 61,979,607 | 25,965,403 | 151,200,057 | 17.2 |
| 200,000 — 250,000 | 1,699 | 46,772,306 | 19,609,506 | 116,963,786 | 16.8 |
| Over 250,000 | 3,885 | 183,042,333 | 76,815,851 | 558,543,348 | 13.8 |
| Totals | 106,425 | 681,445,279 | 257,716,410 | 1,648,728,935 | 15.6 |
| *"Gross tax" means the tax that would be due before relief is allowed for retirement annuity deductions. |
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