Pension and ill health drawdown of entire DC pot

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Daddy Ireland

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Can someone privide guidance. A person aged 55 at the time left private sector and got 25% lump sum of defined contribution (DC) pot and placed remaining monies of under 150k in both ARF/AMRF. The person then joined the public sector for 2 years and has given up work due to serious illness. Due to serious illness, I understand under private sector DC scheme that 4% can be taken if needed of ARF/AMRF ahead of turning 60 years of age. The person is in receipt of invalidity pension and a small public sector pension. Can this person having a serious illness drawdown in full the DC ARF/AMRF pots and if so is that only subject to 20% tax ?
 
You can withdraw up to 4% per year from an AMRF regardless of your age or health. You can withdraw any amount you want from an ARF, again regardless of age or health. Any withdrawals from either an AMRF or an ARF will be subject to tax as income, so the usual tax bands will determine whether the 0%, 20% or 40% rate applies.
 
Yes The A(M)RF funds are Liable to PAYE Tax and USC. This Income A(M)RF may also be subject to PRSI at the "S" Class rate, currently 4% until you reach State Pension Age, 66 currently. You also indicate that there are two other sources of income, Invalidity Pension & Public sector Pension. If the invalidity pension is from the private sector it will be subject to PAYE Tax and USC, it may also be liable to PRSI, Check your payslip,and see what is the class of PRSI applied, Class A or S 4%, class M 0%. If this income is from the public sector it will be subject to PAYE Tax, and may be liable to USC, again check payslip, The small public sector pension will have PAYE tax applied, and USC, and may or may not be subject to PRSI, again check pay slip for what is deducted.
It is worth noting that if your 2 existing incomes exceed €12,700.00c per annum (Current Legislation) The AMRF can be converted into an another ARF, and you are then not restricted to the 4% drawdown limit of an AMRF fund, In any case check your existing payslips and gather all the information pertaining to deductions. It will be worth checking the Revenue site to find out if there any other exemptions or reliefs available for your circumstances.
 
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