Catherine Connolly (Galway West, Independent)
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17. To ask the Minister for Finance if, in light of the estimate of the €200 million cost of extending the current employer tax relief to the auto-enrolment cohort contained in the 2022 regulatory impact assessment of the Pensions Auto Enrolment Bill, this additional employer tax relief will apply to the auto enrolment scheme ("My Future Fund") when it comes into effect on 1 January 2026; and if he will make a statement on the matter. [38081/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware the operation of the automatic enrolment retirement savings scheme, known as auto-enrolment, is a matter for the Minister for Social Protection, and the legislative framework for auto-enrolment was introduced in the Automatic Enrolment Retirement Savings System Act 2024. However responsibility for taxation policy including for auto-enrolment lies with me as Minister for Finance.

Officials from my Department and Revenue worked closely with officials from the Department of Social Protection to develop the legislative provisions governing the taxation treatment of auto-enrolment savings. As agreed by Government in March 2024, the approach is to align as much as possible with the taxation of Personal Retirement Savings Accounts (PRSAs), other than for employee contributions (where for auto-enrolment a State contribution is provided in place of tax relief on employee contributions). Therefore, in line with this Government decision, the taxation provisions set out in Finance Act 2024 provide for tax relief for employers for the contributions paid as part of the auto-enrolment scheme, as is already available for employer contributions to a PRSA. The provisions in Finance Act 2024 are subject to a commencement order and will be commenced to align with the start date for the auto-enrolment scheme.

The cost referenced by the Deputy forms part of a costing exercise prepared earlier in the development of the auto-enrolment scheme which was included in the Regulatory Impact Analysis that accompanied the draft scheme of the Automatic Enrolment Retirement Savings System Bill published in 2022. As part of the Budget 2026 process my officials are preparing updated costings for this relief. However, I would note that the cost referenced by the Deputy relates to the cost of the final contribution rates for automatic enrolment, including an employer contribution of 6% of salary, which, as set out in the Automatic Enrolment Retirement Savings System Act 2024, will apply from year 10 of the scheme. In years 1-3 the contributions from employers are set at 1.5% of salary, and therefore the expected cost of tax relief for employer contributions in 2026 is significantly less than the figure referenced by the Deputy.