Tax relief on pension contributions must be protected – McGrath

– Over 600,000 workers receive relief on pension contributions –

Fianna Fáil Spokesperson on Finance, Michael McGrath TD has said that tax relief for employees paying pension contributions, including marginal rate relief which is currently enjoyed by hundreds of thousands of workers, must be protected.

The Interdepartmental Pensions Reform and Taxation Group is currently examining a number of specific measures including tax relief under the Government’s Roadmap for Pensions Reform 2018 – 2023.

To date, Minister Paschal Donohoe has refused to rule out changes to the system of tax relief on pension contributions.

Deputy McGrath commented, “Tax relief enjoyed by workers on the contributions they are paying into their future pensions is an invaluable support for workers and is a key incentive for people to save for their retirement.

“The marginal rate relief on pension contributions is vital to several hundred thousands of workers and it must be protected.

“According to the Revenue Commissioners, tax relief on employee pension contributions is availed of by 618,900 workers, a significant proportion of which avail of relief at the marginal rate of 40 per cent.

“Contrary to what some believe, a pension is not a luxury. Any change to the marginal rate of relief would represent a significant tax increase for middle Ireland and it is something we could not support.

“There have been worrying signals that the relief would be scaled back or even removed altogether. We know that Sinn Féin have previously called for the removal of marginal rate relief and they seem to have Fine Gael’s ear at the moment.

“Fianna Fáil certainly would not support any such move particularly in the absence of any detailed alternative that was of equal value to taxpayers.

“This country faces a serious issue in terms of pension coverage, and to remove a relief that incentivises workers to invest in their pension would be a very short sighted and counterproductive move.

“The Government should remove any uncertainty now by confirming that pension tax relief, including marginal rate relief, will not be removed unless some relief of equivalent value is given in a reformed system,” concluded McGrath.

Fianna Fáil
Michael McGrath TD
Spokesperson on Finance

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