# prsa top up



## seantheman (4 Jul 2007)

are the revenue very strict on the 3 month cut off for investing matured ssia money into prsa to obtain revenue top up? my wifes 3 months were up on 30 june!


----------



## ClubMan (4 Jul 2007)

As far as I know they are.


----------



## Guest126 (4 Jul 2007)

If either you or your wife pay tax at the marginal rate you would be much better off investing it in a pension as a deduction from pensionable income.

The SSIA top-up is most advantageous for people that do not pay tax.


----------



## seantheman (24 Jul 2007)

thanks for the earlier reply's guys. got the maturity date wrong, it's actually the last day in july. spoke to a rep from new ireland who says its a "no brainer" as regards whether to start a prsa and benefit from top up. which leaves me a little confused by capital's earlier reply. my wife and i are both paye workers on the 20% tax rate


----------



## South (25 Jul 2007)

The New Ireland rep sounds like a "no brainer"!

Marginal rate tax relief is far more valuable than the SSIA top-up.

Given that you are paying only 20% tax, then it's pretty much the same to you whether you get tax relief or take the SSIA top-up.


----------



## aidan119 (25 Jul 2007)

If you use the SSIA top-up route you also get a pro-rata refund of the exit tax on the SSIA. This is given as an aditional tax credit.


----------



## ClubMan (25 Jul 2007)

Good point - but the (partial) refund of _SSIA _maturity/exit tax will usually be small beans in comparison to the main transfer incentive of €1 for every €3 of _SSIA _funds transferred to a pension (up to a maximum of €2.5K for €7.5K).


----------



## South (25 Jul 2007)

And would certainly not make it comparable with 41% tax relief and prsi relief too...


----------



## ClubMan (25 Jul 2007)

No - I think it's generally accepted that the _SSIA _to pension incentive scheme is best suited to those who don't pay tax or maybe (?) those who pay tax at 20%.


----------



## seantheman (25 Jul 2007)

so its clear cut then? in our situation my wife would do well to avail of revenue add on.


----------



## ClubMan (25 Jul 2007)

No - it's not clear cut to me at the moment. If one of you was paying no tax and the other was already maximising pension tax/_PRSI _relief then it would probably be a no brainer for the non taxpaying spouse to avail of it.

In this case through the _SSIA _to pension incentive scheme you both stand to gain 25% (€1 for €3) subject to a maximum of a €2.5K topup for €7.5K transferred. You will also get back a portion of the _SSIA _exit tax. If you were not already maximising your pension contributions to avail of the maximum tax/_PRSI _relief for your age you would be able to increase them in order to avail of 20% tax and up to 6% _PRSI _(4%)/health levy (2%) relief assuing that you were on _PRSI Class A1_. If this was the case then the 26% achievable this way may be better than the _SSIA _pension transfer incentive. Also - if you did not maximise your 2006 pension contributions you could make a lump sum contribution before Octover 31st 2007 (see the key posts) and set it against 2006 income. Of course once you maximise your 2006/2007 pension tax/_PRSI _relief and still have money spare to invest then you could also avail of the _SSIA _transfer incentive. That's myunderstanding of the situation anyway - I could well be wrong. You should probably get professional advice and not depend on somebody with a vested interest for advice (e.g. the pension guy mentioned earlier).


plus a proportion of the exit tax back. If you were not already maximising your pension tax relief then you could gain 20% tax plus


----------



## South (25 Jul 2007)

ClubMan said:


> In this case through the _SSIA _to pension incentive scheme you both stand to gain 25% (€1 for €3) subject to a maximum of a €2.5K topup for €7.5K transferred.


 
Sorry Club but €1 for €3 is a 33% top-up!!


----------



## ClubMan (25 Jul 2007)




----------



## seantheman (26 Jul 2007)

i think yer right clubman, i do need professional advice, only at this stage i'm not sure wheather it's a financial adviser or a shrink i need


----------



## South (26 Jul 2007)

If you both do not pay over 20% tax, take the SSIA top-up.


----------



## seantheman (26 Jul 2007)

thanks south, she'll be startin a prsa on friday. i guess the rep who knew our tax situation wasn't brainless after all. thanks to all who contributed to the forum, its not a given that my wife will use new ireland.


----------



## South (26 Jul 2007)

Well, as CapitalCCC says, if you were a high rate tax payer then it would be brainless...even for a 20% tax payer, if rep did know that, a 20% tax relief and PRSI and health levy relief would mean that is probably the slightly better deal but at that stage the difference is miniscule, it is definitely not a no brainer.


----------



## ClubMan (26 Jul 2007)

South said:


> If you both do not pay over 20% tax, take the SSIA top-up.


Thanks - simpler than my incorrect convolutions above....


----------

