Written answers
Tuesday, 10 March 2009
Department of Finance
Pension Provisions
9:00 pm
Frank Feighan (Roscommon-South Leitrim, Fine Gael)
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Question 179: To ask the Minister for Finance if he will examine the application of pension levy in the same manner as income tax at a uniform level of salary over the whole year in order to avoid employees being hit with growing and graduated deductions as year progresses which leave them being hit with very high and disproportionate amounts in autumn and winter as the move to year end will throw their personal budgets out. [10212/09]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Regulations will be introduced under Section 3 of the Financial Emergency Measures in the Public Interest Act 2009 for the purpose of the calculation, making, collection, disposal and recovery of the deductions. The deductions will be made on what is known as a "week-1 basis". This means that each payroll pension related deduction is calculated without reference to the previous pay period. The objective is to keep deductions similar throughout the year, assuming that remuneration remains at a similar level. Of course, if there were a big increase in one's remuneration in a particular payroll, there would also be a rise in the pension related deduction for the individual. At year-end the precise amount due is determined, and repayment or recoupment of the over- or under-payment will be carried out for each affected individual. In general, for persons earning more than €20,000 p.a., no end-of-year adjustment will be required.
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