retirement changes in ireland november 2010?

jellen

Hi,

Apologies if this question has been answered before.... have done numerous google searches tonight so far !

In short, my mother in law is due to retire in Feb 2011 after 44 years service. She is a public health nurse.

I've heard something at the back of my mind that its more beneficial for her to retire before the end of november 2010 as some state rule is due to kick in ? Is this correct am I confusing a number of issues?

Any help would be appreciated - I've lived abroad for 21 years and am a little out of touch with the irish tax system !

Many thanks,

Godge

In January 2010 public service salaries were reduced by up to 10%.

It was agreed that those who retired before Devember 2010 would not have that reduction applied to either their pension or lump sum. As a result of the Croke Park Agreement, this deadline was extended until December 2011. So there is no difference for your mother in retiring now or anytime in 2011.

However, that doesn't allow for any changes that the Minister for Finance might announce on budget day. For example, it has been rumoured that he will move to tax pension lump sums. On the other hand, there is speculation that any such tax would only be on amounts over a certain figure (somewhere between 120k and 200k has been mentioned). So if your mother's lump sum (1.5 times salary) is likely to be less than 120,000, then there should be no issue.

Finally, and most unfortunately, there is no certainty in any of this because of the state FF have put the country in. It is possible (though unlikely) that some or all of the arrangements above will be changed in the budget.

jellen

Hi Godge! - Many thanks for your reply- much appreciated.

NotInventedHere

Tell her to retire now. She has her full service and she will be guaranteed he full pension with no reductions.