Written answers

Wednesday, 18 February 2009

Department of Finance

Pension Provisions

8:00 pm

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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Question 79: To ask the Minister for Finance his views on whether the impact of the proposed public sector pension levy is equitable on those on middle incomes in particular, with those on middle incomes expected to lose a higher proportion of their take-home pay due to the impact of tax relief on pension contributions; and if he will make a statement on the matter. [6357/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am satisfied that the pension related deduction for the public service is equitable, including for those on middle incomes. The pension related deduction applies generally across the public service, given that public servants enjoy the benefits of a public service pension which provides for greater security and more favourable terms than the generality of private sector pensions. Due to the availability of tax relief at the marginal rate for pension contributions, in certain circumstances an individual on a higher gross income may suffer a lower net loss than an individual on a lower income as a result of the new pension related deduction. However, it must be stated that, across the public service, total deductions (including income tax, PRSI, health levy and the new pension related deduction) will be higher as a percentage of gross pay as pay levels increase.

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