Written answers
Tuesday, 7 November 2006
Department of Social and Family Affairs
Pension Provisions
8:00 pm
Paul McGrath (Westmeath, Fine Gael)
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Question 380: To ask the Minister for Social and Family Affairs if he will clarify if a 30% of income pension contribution made by a worker over 50 years old is exempt from PRSI contributions; and if he will make a statement on the matter. [36384/06]
Séamus Brennan (Dublin South, Fianna Fail)
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Under measures introduced to encourage the growth of private pension coverage a worker employed under a contract of service may, subject to certain limits, obtain relief in respect of PRSI in respect of contributions made for pension provision. The maximum pension contribution, in any one year, for which a person is entitled to relief, varies and is related to the person's age and expressed as a percentage of gross income. The relevant limits are set out hereunder:
Highest year in age of pension Contribution | Percentage of gross income for which relief is available for pension contributions |
% | |
Under 30 | 15 |
30-39 | 20 |
40-49 | 25 |
50-54 | 30 |
55-59 | 35 |
60 and over | 40 |
Accordingly 30% of income pension contribution made by a worker over 50 years old is exempt from PRSI contributions and the level of exemption rises in accordance with the age bands indicated above.
As part of Towards 2016 the Government is committed to publishing a Green Paper on pensions outlining the major policy choices, the challenges in this area and the views of the social partners. The various incentives provided to encourage participation in occupational and private pensions will be important elements in any discussions on future pension policy.
It is hoped to publish this at the end of March next year and there will then be a consultation process. The Government is committed to responding to the consultations on foot of the Green Paper by developing a framework for comprehensively addressing the pensions agenda over the long-term.
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