Tax on Redundancy

[Blarney]

Hi All,
My brother was recently made redundant and I have looked at the tax he has paid to see if its right. He got a sum over and above the statutory redundancy. One thing I dont understand is, on the revenue.ie website it says......

If you are not a member of an occupational pension (Superannuation) scheme or if you irrevocably give up your right to receive a lump sum from the pension scheme, the basic exemption as outlined above can be increased by €10,000!!

What exactly does this mean? My brother is entitled to a transfer value of approx €24,000 to another pension scheme or indeed can leave that there and get a pension from it at retirement. Does this mean that if he gives up the option of taking a lump sum out of this when he eventually retires that this increase can be applied?

Thanks!
Blarney

 

[Deepsea]

Hi,

A friend of mine was faced with a similar situation a few weeks ago. His advisor checked out the pension lump sum thing! And he took the extra €10,000 lump sum.
The pension lumpsum rule only applied to a pension with the employer he was being made redundant from. And in his case didn't amount to much as he only was with the company for 6 years.

Taking the additional €10,000 redundancy does not effect any future pension lumpsum's as we understand it.

Hope this help's

Deepsea.