Written answers

Tuesday, 22 September 2015

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent)
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295. To ask the Minister for Finance if he will reconsider the serious negative impact of the pension levy on ESB, Electric Ireland and ESB Networks pensioners; her plans to restore the income lost by the imposition of this levy; and if he will make a statement on the matter. [31642/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The original 0.6% stamp duty levy on pension fund assets ended last year. The additional levy of 0.15% which I introduced for 2014 and 2015, mainly to help continue to fund the Jobs Initiative, will also end after this year.

The position is that the equivalent value of all of the money raised from the stamp duty levy has been used to fund the wide range of measures introduced in the Jobs Initiative to protect existing jobs and to help create new jobs and the Initiative has been a success in this regard.  The measures introduced include expenditure measures such as the Jobbridge and Springboard schemes, as well as a number of tax and PRSI incentives such as the reduction in the VAT rate from 13.5% to 9% for the tourism and hospitality sectors and the halving of the lower employer PRSI rate. 

The pension fund stamp duty levies are charged on the trustees of pension schemes and others (including insurance companies) who have responsibility for the management of the assets of pension schemes or plans. It is up to the trustees of pension schemes, for example, to decide whether and how the impact of the levy should be passed on and who should be impacted and to what extent. I have no detailed information on the decisions made by pension fund trustees or others in relation to the passing on of the full or a partial impact of the levy to the current, deferred or former (retired) members of pension schemes. I am aware, however, that where trustees have made the decision to pass on the impact or part of the impact of the levy to pensioners that a smaller reduction in pension payments over the lifetime of the pension may have been made in many cases in preference to a larger reduction over a shorter period.

The question raises the issue of restoration of income. While the pension fund levies have ceased and will be ceased as I have already outlined, I have no plans to repay the pension fund levy collected as has been requested in the past. The value of the funds raised by way of the levy have been used to protect and create jobs and this has helped to create the improving financial and economic position of the State. Taxpayers to whom the impact of the levy may have been passed on by the chargeable persons responsible for the payment of the levy (the pension scheme trustees etc) will benefit from the changes which I began in Budget 2015 and which will continue in future Budgets to reduce the tax burden on those on low and middle incomes.

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