Written answers

Thursday, 16 July 2015

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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135. To ask the Minister for Finance the revenue that would be raised by reducing the annual earnings limit, along with age-related percentage limits for maximum tax relievable contributions for pension purposes, from €115,000 to €100,000; to €90,000; to €80,000; and to €70,000; and if he will make a statement on the matter. [29728/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I assume that the Deputy is referring to the current annual earnings cap of €115,000, which operates to limit the level of tax-relieved personal pension contributions in any one year. The annual earnings cap acts, in conjunction with age-related percentage limits of annual earnings, to put a ceiling on the annual amount of tax relief an individual taxpayer can obtain on pension contributions.

A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available as tax returns by employers 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 (RACs) and Personal Retirement Savings Accounts (PRSAs) 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, only a limited statistical basis for providing definitive figures. However, Revenue advise me that the impact to the Exchequer from reducing the annual earnings cap for individual contributions to occupational pension schemes, RACs and PRSAs may be tentatively estimated. Such estimates take no account of any behavioural impacts that may arise from the proposed changes and that could affect the scale of any yield.

I am informed by Revenue that on the above basis, the estimated yield  of reducing the ceiling can be found on page 11 of Revenue's Ready Reckoner, available on Revenue's statistics website at .

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