Revenue Note for Guidance

787E Extent of relief

Summary

This section sets out the extent of the relief which an individual may obtain in any year in respect of contributions to one or more PRSAs. Subject to the other provisions of the section, the relief is expressed as a percentage of net relevant earnings, is age-related and varies as between members and non-members of occupational schemes.

This section should be read in conjunction with section 790A which provides that, for the purposes of giving relief to an individual under Chapters 1, 2, 2A and 2B, the aggregate of the amounts, if any, of income – taken into account separately for each of the relevant reliefs – is not to exceed an earnings limit of €115,000.

Details

Non occupational scheme member

(1) The amount of contributions which may be deducted or set off in any year of assessment, expressed as a percentage of the individual’s net relevant earnings, is as follows –

·	Individual who at any time during the tax year
	is aged 30 or over and less than 40	20%
·	Individual who at any time during the tax year
	is aged 40 or over and less than 50	25%
·	Individual —
	who at any time during the tax year is aged 50
	or over and less than 55, or
	who is less than 55 and whose relevant earnings for the year were derived
	wholly or mainly from a sporting occupation
	specified in Schedule 23A	30%
·	Individual who at any time during the tax year
	is aged 55 or over and less than 60	35%
·	Individual who at any time during the tax year
	is aged 60 or over	40%
·	All other cases	15%

Employer contributions

(2) PRSA contributions made by an employer which are regarded, by virtue of section 118(5), as a benefit-in-kind in the hands of the employee are treated for the purposes of the relief as if they had been made by the employee.

Members of occupational pension schemes

(3)(a) An individual who is a member of an approved scheme or a statutory scheme (other than a scheme which is limited to the benefits referred to in section 772(3)(b) and (c)) may, in relation to his or her income from the office or employment, only claim AVC PRSA contributions.

(3)(b) Relief in respect of any such contributions is confined to the following proportion of the remuneration from the office or employment-

·	Individual who at any time during the tax year
	is aged 30 or over and less than 40	20%
·	Individual who at any time during the tax year
	is aged 40 or over and less than 50	25%
·	Individual who at any time during the tax year
	is aged 50 or over and less than 55	30%
·	Individual who at any time during the tax year
	is aged 55 or over and less than 60	35%
·	Individual who at any time during the tax year
	is aged 60 or over,	40%
·	All other cases	15%

These amounts are reduced by any contributions by the employee to the pension scheme related to the office or employment, including Additional Voluntary Contributions to the scheme.

(3)(c) The amount of net relevant earnings against which any other PRSA contributions may be set is reduced by the remuneration from the pensionable office or employment.

(3)(d) Also, the aggregate benefits to be provided by any PRSA, to which AVC PRSA contributions are made, and by the pension scheme cannot exceed the maximum benefits that could be provided by the pension scheme.

Minimum relief

(4) Except in the case of contributions to an AVC PRSA, an individual can be granted tax relief for PRSA contributions up to €1,525 irrespective of the level of the individual’s income.

Aggregation of PRSA and RAC reliefs

(5) Where an individual is entitled to relief in respect of both a payment to a retirement annuity contract and a PRSA contribution, the maximum relief for the PRSA contributions, other than AVC PRSA contributions, is reduced by the amount of any RAC relief.

Relevant Date: Finance Act 2019