High Income Individuals and the limitation on use of certain reliefs: PRSI and Health Contributions position.

With effect from 1 January 2007, Chapter 2A of Part 15 of the Taxes Consolidation Act 1997 (TCA 1997) and Schedules 25B and 25C to that Act provide a measure which limits the use of certain tax reliefs and exemptions by certain high-income individuals. This e-Brief clarifies the position of such individuals for PRSI and Health Contributions purposes.

The Department of Social and Family Affairs and the Department of Health and Children have confirmed that the position of high-income individuals in relation to liability to PRSI and Health Contributions is unaffected where they are subject to the restriction on the use of tax reliefs and exemptions.

This position applies both to the year in which any restriction arises and to any subsequent year to which excess relief is carried forward. The basis for this position is that the restriction (and the re-calculations required under Chapter 2A) only affects the taxable income figure for tax purposes rather than the amount of income that is liable to PRSI and Health Contributions. Therefore, PRSI and Health Contributions should continue to be calculated as if Chapter 2A of Part 15 had not been enacted.