Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance if he has information and if he will provide a breakdown of the number of persons who claimed tax free lump sums in 2011 in the following categories, under €50,000, €50,000-€75,000, €75,000-€100,000, €100,000-€150,000, €150,000 - €200,000, €200,000 plus. [46951/12]

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. As there is no general requirement for data on the number or value of retirement lump sums below the €200,000 limit to be returned to my Department or to the Revenue Commissioners, I am not in a position to provide the figures requested in the question in that regard.

As regards lump sums exceeding €200,000, returns provided to the Revenue Commissioners in respect of lump sum payments between €200,001 and €575,000 indicate that 375 individuals paid tax of €6.6 million for the year 2011. Information is not available to identify the number of individuals, if any, receiving lump sum amounts in excess of €575,000, or the associated tax yield, as such amounts are taxed at the individual’s marginal tax rate (together with USC) as income under the normal PAYE system.

Martin Heydon (Kildare South, Fine Gael)
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To ask the Minister for Finance the reason a tax concession which previously existed to ease the administrative burden where small payments were made to those under 50 from pension schemes that were being wound up has been curtailed; if this situation will be reviewed; if Revenue will correspond with an organisation (details supplied) which has been having difficulties in getting a response on this matter; and if he will make a statement on the matter. [46970/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that tax relief is provided at an individual’s marginal income tax rate on amounts contributed to pension schemes (subject to limits). Relief is also provided on contributions made by the employers to such schemes. In addition the amount of profits and gains generated by the investments held by those pension schemes is exempt from tax. Pension benefits are taxable at the individual’s marginal rate, so the amount of tax due will depend on the individual’s personal circumstances. There may be an opportunity to take part of the pension benefit as a tax-free lump sum but this depends on the rules of the pension scheme and is subject to an overall limit of €200,000. When the pension benefits are drawn down they become taxable at the individual’s marginal rate.

There are no circumstances, other than ill health, where a member less than 50 years of age is allowed to make cash withdrawals from an on going pension scheme. However, as a concession in the case of scheme wind-ups where the value of an individual member’s fund is less than €2,000, Revenue allows a once off taxable payment to the individual. It was clarified to the organisation concerned in May 2012 that such payments are subject to tax at the individual’s marginal rate of tax. I am informed that the Revenue Commissioners issued a reply on 20 September 2012 to the representations made by the organisation involved outlining their position on this matter.