Pension Related Deduction
The PRD is the ‘Pension Related Deduction’, or pension levy. The lower threshold for PRD was €15,000 – below this income level there was no liability for PRD. On 1 January 2016 the exemption threshold for payment of Pension Related Deduction (PRD) increased from €15,000 per annum to €26,083 per annum (worth a €733 reduction in PRD to those who currently pay PRD in excess of this amount) and on 1 January 2017 it will increase further to €28,750. This means for all public servants from 1 January 2017 that remuneration below €28,750 will no longer be liable to PRD, while the increase in the threshold to €28,750 is worth €1,000 euro reduction in PRD to each public servant (who currently pays PRD in excess of this amount) on a full year basis with the low paid benefiting to a greater extent through the tax code.
For those on less than €28,750 the impact on each individual will vary depending on their total remuneration and their current liability for PRD.
Public Service Pension Reduction:
The amelioration of the Public Service Pension Reduction (PSPR) currently applicable to all public service pensions exceeding the relevant thresholds is being implemented under the Financial Emergency Measures in the Public Interest Act 2015, with changes occurring in three stages, on 1 January 2016, 1 January 2017 and 1 January 2018.
On 1 January 2016, increases in the annual pension thresholds before PSPR applies were activated. These exemption threshold increases remove PSPR entirely from a significant number of pensions with relatively lower values, while those pensions which continue to be impacted by PSPR receive a boost of €400 per year.
On 1 January 2017, additional PSPR amelioration, acting principally via further exemption threshold increases, will fully remove PSPR from another significant tranche of public service pensioners, while at the same time boosting those pensions which remain affected by PSPR by €500 per year.
On 1 January 2018, the third stage of PSPR amelioration will ensure that all PSPR-impacted pensions with values up to €34,132 will be fully restored, meaning that PSPR will no longer affect such pensions, while those pensions which continue to be impacted by PSPR will get a boost of, in most cases, €780 per year.