Can lump sum abatement be made up in full with AVCs?

[Dave Vanian]

Person retires from old PS scheme with 40 years' service. Lump sum is 1.5 x final salary. Lump sum is reduced by an amount for abatement, effectively "arrears" of Spouses and Children Scheme payments from years ago. For example, let's say the arrears deducted from the lump sum is €15,000. The person also has an AVC fund for the same employment. Can they bring their tax-free lump sum back to the full 1.5 x salary using €15,000 of the AVC fund?

Can they also claim tax relief (within limits) on the €15,000 as an employee pension contribution?

Thank you.

 

[Jadele]

Yes, tax relief is allowed on the spouses & children's arrears deduction. I'm not sure about the avc, but I expect that you should be able to do it.

 

[S class]

Can they also claim tax relief (within limits) on the €15,000 as an employee pension contribution?

Yes this is allowed.

However I ran into a problem when I tried to reclaim the tax refund.
There are rules about how many back years can be used to reclaim the tax relief.

I had maxed out my yearly age related tax free pension contributions for all of the allowable back years.

Because of this I did not claim the tax relief.

 

[Jadele]

I got a letter from the pension provider and submitted a claim to revenue and they processed it and they repaid the tax claim. Note the letter states the amount paid in arrears and advises to submit yo revenue.