Seán Fleming (Laois-Offaly, Fianna Fail)
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Question 162: To ask the Minister for Finance the reason he has approved new arrangements to grant tax-free lump sums of up to €200,000 to Secretaries General who retire after February 2012; and if he will make a statement on the matter. [35139/11]

Michael Noonan (Limerick City, Fine Gael)
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The following are the current arrangements which apply in relation to the taxation of retirement lump sums paid under Revenue approved pension arrangements. These arrangements apply in both the public and private sectors and were introduced in Budget and Finance Act 2011:

- Retirement lump sum amounts up to €200,000 are paid free of tax. They are also paid free of the Universal Social Charge (USC).

- The portion of a lump sum between €200,001 and €575,000 is taxed on a ring-fenced basis at 20%. (This means that no tax credits or other tax reliefs can be set against this portion of the lump sum.) No USC is chargeable.

- Any amount of a lump sum in excess of €575,000 is taxed under Schedule E and collected under the PAYE system (credits and other tax reliefs are available). In this instance, USC is also chargeable on the excess.

These amounts are lifetime amounts with prior lump sums taken since 7 December 2005 aggregating with later lump sums.