The Government has been accused of asking ordinary workers to help build up the “gold-plated” pension pots of the elite following the controversial Government decision to allow retirees get tax relief on up to €2.8 million in their pension pots.
Sinn Féin finance spokesman Pearse Doherty accused the Government of moving to “significantly benefit the wealthiest taxpayers”, adding that last year 254 people had a pension pot above €2 million and the average pension pot was only €111,000. “People could only dream of €2 million,” he said.
On Wednesday the Cabinet agreed a proposal from Minister for Finance Jack Chambers to gradually increase the current €2 million tax-free limit by €200,000 a year from 2026 until it reaches €2.8 million in 2028.
The move follows concerns last year that the €2 million limit before tax of 40 per cent is introduced was dissuading gardaí from applying for senior positions and also acted as a barrier for other high earning public servants.
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But Mr Doherty described the tax change as “madness” and said the Government is asking “those who work in Tesco’s or nurses or guards or firefighters or teachers to help build up the pension funds of those at the very top, to the tune of €2.8 million”.
He said they could retire with the State-supported pension of €100,000 a year with a “massive tax break of €320,000″. He added: “It is crazy.” These are people with pension pots already of €2 million and an annual pension entitlement of over €70,000.
“Meanwhile those on the State pension languish and are left with crumbs off the table. And this is the wrong choice that the Government is making at any time but definitely the wrong choice when we’re dealing with a crisis in terms of cost of living and workers and families are struggling.”
He claimed the Minister for Finance could not tell the Budget Oversight Committee how much this measure would cost, “but we do know that it is estimated to be in the hundreds of millions of euro”.
The Donegal TD said the Government could not defend this as he asked Minister for Housing Darragh O’Brien “why should we be asking the workers of Tesco or the hairdressers or the workers on the shop floor to actually help contribute to a pension pot of €2.8 million for the most wealthy in Irish society”.
Mr O’Brien, standing in for Tánaiste Micheál Martin on leaders’ questions said the decision arose from an independent report – by Dr Donal de Buitléar - and “in a very phased way from 2026 to increase the standard funding threshold”.
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He added that since the Government came into office, the State pension had increased by €29 a week “and we’re focusing very, very closely in our budget negotiations of ensuring that those on the State pension receive the increases that they deserve”. They had also done very significant work on non-contributory pensions and had introduced pension auto-enrolment.
Mr O’Brien said Sinn Féin had proposed to reduce pension tax relief year on year to the standard rate, “which would take the legs from under your average nurse”.
But Mr Doherty said this was a “complete mistruth”. He said the move will entitle them to a State-supported pension of €100,000 and a tax cut of €320,000. He said ordinary people “don’t have a whiff of pensions of €70,000, €80,000, €90,000.”
The Minister said the Government have been reforming pension arrangements and auto enrolment would change the situation where only 50 per cent of people have made pension provision themselves.
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