Monday 26 February 2018

Surge in pension pay-offs of more than €200,000

Gardaí can retire as young as 50 as long as they have accrued 30 years’ service. Members must retire on compulsory age grounds at 60 (Stock Image)
Gardaí can retire as young as 50 as long as they have accrued 30 years’ service. Members must retire on compulsory age grounds at 60 (Stock Image)

Gordon Deegan

The number of people enjoying pension lump sum pay-offs over €200,000 last year jumped by 3pc to 910.

That is according to Finance Minister Michael Noonan who said the tax paid by the 910 last year totalled €13.2m based on figures provided by the Revenue Commissioners.

However, Mr Noonan said the tax take in 2015 from the 883 who received pension lump sums in excess of €200,000 that year was €14.8 million.

The Minister also revealed that in 2014, 888 received pension pay-offs in excess of €200,000 and paid €12.2m in tax, while 857 in 2013 received lump sums in the same bracket and paid €14.4m in tax.

In a written Dáil reply to Sinn Féin's Pearse Doherty, Mr Noonan said those who received lump sums below €200,000 are tax-free.

On the tax to be applied to the sums over €200,000, a Revenue Commissioners spokeswoman explained: "The portion between €200,000 and an amount equivalent to 25pc of the Standard Fund Threshold (SFT) when the lump sum is paid - which is called the SFT cut-off point, and is currently €500,000 - is chargeable to tax at the standard rate of income tax in force when the lump sum is paid, currently 20pc."

She said: "The second portion, i.e. the portion over the SFT cut-off point, is chargeable to tax and USC at the individual's marginal rate."

The most recent figures for gardaí show the top 20 retirement lump payments for the force in 2015 totalled €2.78m - or an average of €143,924.

The top payment in 2014 to a retiring garda was €262,000 but the FOI unit declined to reveal the rank and county of the top 20 recipients for 2015.

Gardaí can retire as young as 50 as long as they have accrued 30 years' service. Members must retire on compulsory age grounds at 60.

Members who retire on full service receive an annual pension of 50pc of their final salary and a one-off gratuity of 150pc of their final salary.

The level of payments and their liability to tax and other deductions, are determined by existing pension orders, statutory instruments and primary legislation.

Irish Independent

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