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Written Answers - Exchequer Savings

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 65.  Deputy Jim Daly Information on Jim Daly Zoom on Jim Daly  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  the savings that would be achieved by the Exchequer if a new tax was introduced on a temporary basis to tax all pension payments to retired public servants in excess of €50,000 at seventy five per cent; and if he will make a statement on the matter. [7492/12]

[133]Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Retired public servants in receipt of a pension in excess of €50,000 per annum are currently subject to income tax at 41% and Universal Social Charge at 7% or 4% if they are 70 years old or over. A new temporary charge of 75% on income in excess of €50,000 could bring their tax liability on this income to 123%. I assume that this is not the Deputy’s intention. Furthermore, I am of the opinion that imposing a temporary tax of 75% on a specific class of pensioner may be considered arbitrary and disproportionate and could, therefore, pose constitutional difficulties.

The Deputy may be making the point that savings could be made for the Exchequer by reducing pensions paid to public service pensioners. This is a matter in the first instance for my colleague the Minister for Public Expenditure and Reform. The Deputy may be aware that the Financial Emergency Measures in the Public Interest Act 2010 has reduced public service pensions, in a progressive manner, with reduction rates of 12% and 20% applying to public service pensions in excess of €60,000 and €100,000, respectively.

Question No. 66 answered with Question No. 55.

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