Private Pension Contributions for Homemaker

E

elcaro

Registered User
Messages
13
Hi,

I'm the sole income earner in our household and I maximise my private pension contributions (i.e. tax relief) given my age

My wife works as a homemaker and she has no taxable income or private pension.

Can we make contributions into a private pension for her and claim additional tax relief?

Thanks!
 
Tax relief on pensions can only be claimed against earned income, so no
 
Is there a likelihood that your wife will be going (back) into paid employment in the future? If so, unused tax relief can be carred forward into future years.
 
Dave Vanian said:
Is there a likelihood that your wife will be going (back) into paid employment in the future? If so, unused tax relief can be carred forward into future years.
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Interesting, I/ my wife would be in that situation , Dave . Wife re entered work force this year after a few years out but she made €1200 per anum pension contributions over the last 10 years. Does the 4 year rule apply here or can you go back further than that ?
 
marsaday said:
Interesting, I/ my wife would be in that situation , Dave . Wife re entered work force this year after a few years out but she made €1200 per anum pension contributions over the last 10 years. Does the 4 year rule apply here or can you go back further than that ?
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As far as I know the four year rule doesn't apply to carrying forward unused tax relief on contributions, so I'd start by claiming relief on all contributions.
 
As long as you are within the percentage allowable for each of those years , I presume , Dave ?
?
 
marsaday said:
As long as you are within the percentage allowable for each of those years , I presume , Dave ?
?
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Veering sideways a bit but is this a PRSA? Revenue Pensions Manual also says about PRSAs...

"An individual who is not in pensionable employment is entitled to relief on contributions up to €1,525 even if the contribution exceeds the relevant age percentage limit (section 787E(4) TCA). This does not apply in the case of contributions to a PRSA for AVC purposes.

Where full relief cannot be given for a year of assessment for contributions paid in that year, the unrelieved amount may be carried forward to the next or succeeding years and treated as a qualifying contribution paid in subsequent years."

So if it's a PRSA, then she should have been able to claim tax relief even when she wasn't earning.

Anyway, if she's now claiming for past years, it's the relevant percentage for this year that you should be looking at. Let's say she's in her 40s and now earning €40,000 per year. Maximum contribution therefore 25% or €10,000. She can claim previous pension contributions up to €10,000 in this year. If that doesn't use up all her old €1,200 per years then she can repeat next year.
 
What's the situation with Jointly Assessed couples, one maximizing AVC the other with 25k of non paye income taxed at 20%.

I would presume there would be no tax relief. Income is rental income and dividends from various companies some private.
 
Paul O Mahoney said:
What's the situation with Jointly Assessed couples, one maximizing AVC the other with 25k of non paye income taxed at 20%.

I would presume there would be no tax relief. Income is rental income and dividends from various companies some private.
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You're right. Rental and dividend income is not considered to be pensionable income for tax relief purposes. The other spouse is contributing up to the max already. You could start a PRSA - get tax relief up to a contribution of €1,525 per year - see above. Or if the person will have earned income in the future, save up the tax relief for later.
 
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