Written answers

Thursday, 18 July 2013

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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82. To ask the Minister for Finance the cost of providing tax relief at the marginal rate in 2012 on contributions to pension savings including employees' contributions to approved superannuation schemes, retirement annuity premiums, and personal retirement savings accounts; and the accrual to the Exchequer be by reducing these reliefs to the standard rate; and if he will make a statement on the matter. [36006/13]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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The following tables provide a breakdown of the estimated cost of tax and PRSI reliefs relating to private pension contributions for 2008, 2009 and 2010, the latest year for which the most up-to-date data is available. Figures of the numbers availing of the tax reliefs are also provided, where available. Tax relief on employee or individual contributions is allowed at the taxpayer’s marginal rate of tax subject to limits based on annual earnings and age. Figures have been rounded where appropriate.

A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans - retirement annuity contracts and personal retirement savings accounts - by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full-year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts and confining tax relief for the Public Service pension related deduction to the standard rate of 20% would be approximately €560 million. This estimate includes €90 million in respect of the Public Service pension related deduction.

This estimate does not allow for possible behavioural changes that could arise from a change in the rate of relief.

2008

Estimate of the cost of certain tax reliefs for private pension provision Estimated costs
€ million
Numbers
availing
Employees' Contributions to approved Superannuation Schemes655792,600
Employers' Contributions to approved Superannuation Schemes165362,700
Estimated cost of exemption of employers' contributions from employee BIK595362,700
Retirement Annuity Contracts (RACs)353116,000
Personal Retirement Savings Accounts (PRSAs)7453,900
Estimated cost of PRSI and Health Levy relief on employee contributions255Not available

2009

Estimate of the cost of certain tax reliefs for private pension provision Estimated costs
€ million
Numbers
availing
Employees' Contributions to approved Superannuation Schemes730713,600
Employers' Contributions to approved Superannuation Schemes155342,200
Estimated cost of exemption of employers' contributions from employee BIK560342,200
Retirement Annuity Contracts (RACs)237101,300
Personal Retirement Savings Accounts (PRSAs)7756,200
Estimated cost of PRSI and Health Levy relief on employee contributions230Not available

2010

Estimate of the cost of certain tax reliefs for private pension provision Estimated costs
€ million
Numbers
availing
Employees' Contributions to approved Superannuation Schemes600625,100
Employers' Contributions to approved Superannuation Schemes140302,900
Estimated cost of exemption of employers' contributions from employee BIK515302,900
Retirement Annuity Contracts (RACs)18082,200
Personal Retirement Savings Accounts (PRSAs)7352,300
Estimated cost of PRSI and Health Levy relief on employee contributions230Not available

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