As had been largely expected, there were no announcements in relation to pensions in today’s budget other than the €5 weekly increase in the highest rate of State Pension. This increase will take effect from the last week of March 2018 and bring the highest rate to €243.30 per week. Lower rates apply to those who do not meet the average PRSI contributions requirements.
The Government also announced that a new group will be established to consider the amalgamation of USC and PRSI. This could have implications for pensioners who are not liable to PRSI but are to USC.
A consultation document has also been published in relation to the establishment of a Rainy Day Fund. This does not appear to address the long-term pension funding issues for which the National Pensions Reserve Fund was established.
The Finance Bill will be published on Thursday October 19th and we will monitor that for any additional issues that might arise.
Revenue Pensions Manual
Revenue have updated the Pensions Manual to include details on how guaranteed pension increases should be calculated and to reflect the current USC rate applicable to encashment amounts in accordance with section 531AN(3A)(a) of the Taxes Consolidation Act 1997. You can link to the Revenue eBrief here.