Chief Justice raises pension tax concerns with Kenny
THE CHIEF Justice has told the Taoiseach of his worries over possible tax implications on pension lump sums when members of the judiciary retire.
Mr Justice John Murray met Enda Kenny last Thursday for what a Government spokesman said last night was a courtesy call following Mr Kenny’s election as Taoiseach.
The spokesman confirmed that the tax treatment of judges’ pensions was among a number of issues raised by the Chief Justice during the meeting. The spokesman said that that other issues were also discussed during the meeting between the two men.
It is understood that judges have become concerned about the tax implications of last year’s budget which sought to clamp down on high-earning individuals with pension funds worth millions of euro.
The budget limited tax relief to pension funds worth up to €2.3 million but senior public officials such as judges, hospital consultants and former taoisigh would have pensions from the State worth more than the €2.3 million ceiling if they were calculated on the same basis as those in the private sector.
In some instances, the fund necessary to pay pensions at the level they are given to former taoisigh and very senior public sector employees could be up to €1 million above the €2.3 million threshold.
Judges fear that they will be required to pay a substantial tax bill on the element of their pension that is calculated to come from over the €2.3 million figure. While the measure is believed to have been aimed mainly at senior executives in the private sector, it may also apply to defined benefit pension recipients in the public sector.
When former finance minister Brian Lenihan introduced the measure, people whose pension funds exceeded €2.3 million were given until June 7th this year to register details of their pension with the Revenue Commissioners in order to avoid paying tax on their existing funds. Those who fail to register face a tax levy of, effectively, 72 per cent of the value of the excess in their fund. Earlier this month the Revenue said it had received just 144 inquiries.
It was not known whether Mr Kenny was able to give Mr Murray any reassurance or undertook to consider his representations. It is not known also whether Mr Kenny raised with Mr Murray the fact that many members of the judiciary continue to refuse to make a voluntary reduction in their pay, in common with other public sector employees who have faced mandatory reductions.