Richard Bruton (Dublin North Central, Fine Gael)
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Question 136: To ask the Minister for Finance the rational for excluding class seven pension schemes from the insurance levy while including all other pension schemes; his view on whether this will distort the market; and if he will make a statement on the matter. [21098/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I announced in my Supplementary Budget on 7 April 2009 that a 1% levy was being introduced on life assurance premiums from 1 June 2009. However, following talks with the industry, this date has been changed to allow for a lead-in period. The implementation date, as set out in the Finance Bill is 1 August 2009.

The life levy applies to all premium income regarding policies of insurance referred to in classes I, II, III, IV, V and VI of Annex I to Directive 2002/83/EC, the "Life Assurance Directive".

The levy has been introduced on the same classes of life assurance as the previous life assurance levy, which was in place from 1982 to 1993. Class VII, as described in the Life Assurance Directive, relates to the management of group pension funds, and was not included in the previous levy on the basis of representations made by the life insurance industry at that time. For this reason, I have excluded the same insurance classes as were excluded from the previous life insurance levy.

Richard Bruton (Dublin North Central, Fine Gael)
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Question 137: To ask the Minister for Finance if the income levies will be applied to employer contributions to personal retirement savings accounts but not to employer contributions to old style pension plans; and if he will make a statement on the matter. [21099/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The income levy applies to all emoluments of an employment, including anything treated as a taxable benefit-in-kind.

The position is that an employer contribution to a personal retirement savings account (PRSA) is chargeable to income tax in the hands of the employee as a benefit-in-kind under section 118 of the Taxes Consolidation Act 1997. As the income levy treatment follows the income tax treatment the employer's contribution to the personal retirement savings account will also be subject to the income levy.

Section 778 of the Taxes Consolidation Act 1997 provides that an employer contribution made to an approved retirement benefit scheme or a statutory scheme is not treated as a benefit-in-kind for income tax purposes. Again, as the income levy treatment follows the income levy treatment, any employer's contribution to such schemes will not be subject to income levy.