Charlie O'Connor (Dublin South West, Fianna Fail)
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Question 149: To ask the Minister for Finance the cost to the Exchequer of increasing the home carers tax credit to the same rate as the PAYE tax credit in 2007. [43029/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that assuming the enactment of the changes announced in the 2007 Budget the full year cost to the Exchequer of the increase mentioned by the Deputy is estimated at approximately €82 million. This figure is provisional and subject to revision.

Charlie O'Connor (Dublin South West, Fianna Fail)
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Question 150: To ask the Minister for Finance the cost of providing tax relief at the top rate to all taxpayers who are contributing to pensions, subject to a contribution cap of €250,000. [43030/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Tax relief on individual pension contributions is allowed at the taxpayer's marginal tax rate, that is, at the standard or higher rate as appropriate in each case. It is assumed that the change mentioned by the Deputy is to provide tax relief at a rate of 41 per cent, assuming the enactment of the changes announced in the 2007 Budget, for all pension contributions by individuals, including those currently relieved at the standard rate.

It is not possible to provide an estimate of the cost in income tax foregone of the higher rate of relief proposed by the Deputy in respect of employee contributions to occupational pension schemes because the relevant data in relation to contributions is not captured in such a way as to provide a dedicated basis for compiling this information. Tax relief for pension contributions by employees is normally given by way of a deduction from total income in arriving at income for tax purposes i.e. the income for tax purposes of employees is net of their pension contributions (the 'net pay' arrangement).

Provisions were included in Finance Act 2004 with a view to improving data quality and transparency without overburdening taxpayers/ 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 in respect of 2005. Work on developing the necessary technical enhancements to the Revenue computer system to enable this data to be captured is ongoing. This data 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 change in the rate of relief at individual level such as that mentioned by the Deputy.

As regards the self-employed and certain employees in pensionable employment, there is data available in relation to relief on contributions for Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) for the income tax year 2003. RACs and PRSAs are subject to a current contribution cap of €254,000. On that basis, the full year cost to the Exchequer of providing tax relief at 41 per cent in respect of contributions to RACs and PRSAs is tentatively estimated at about €29 million in terms of income tax forgone, but could be considerably higher if the change resulted in new pension contributors claiming the relief.