Former junior minister Róisín Shortall has openly questioned if Labour leader Eamon Gilmore, Taoiseach Enda Kenny, and two senior ministers have kept generous tax breaks for pensions in place for their own gain.
She said Labour had promised to address tax relief for high pensions, which could have saved €400m, but the party instead chose to hit hard-pressed families.
“You have flunked it, Tánaiste, in a very serious way,” she said, directly addressing Mr Gilmore in the Dáil.
Ms Shortall, who lost the party whip following her resignation as junior health minister in September, said the tax relief regime for pensions was “unbelievably generous” and “extremely regressive”.
She said anyone would be able to receive a lump sum of €200,000 entirely tax free.
Facing Mr Gilmore, she said: “I have to ask: Does this have something to do with the fact that those who are responsible for crafting this budget — the four senior ministers at Cabinet, their four secretaries general, their four advisers — are all in the kind of bracket where they can benefit substantially from the largesse of the existing, ridiculously generous pension regime?”
The Government yesterday announced a new cap of €60,000 on the amount of annual tax relief available for pension contributions. It will come into effect in Jan 2014. Tax relief on pension contributions will continue at the marginal rate of tax.
Ms Shortall said it was “extremely disappointing that this is all you could come up” when the relief makes no economical or social sense.
“This pension regime and the budget, generally, represents an assault on ordinary working families and I believe it is a disgrace,” she told Mr Gilmore.
Ms Shortall said that “given the regressive and anti-family nature of this budget, it is not surprising that you have flunked this as well”.
She said there was no basis for taxpayers who cannot afford to make a pension provision to, in effect, pay for huge tax-free pension lump sums for some of the wealthiest people in the country.
“You inherited that regime. Last year, you indicated that you were going to do something about it this year. This year you have failed yet again to tackle this gross area of inequity,” she told Mr Gilmore.
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