Pimbrook Software

6723: Additional Superannuation Contribution (ASC) – the basics (Replacing PRD)

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Author: Pimbrook Support

Additional Superannuation Contribution (ASC) – the basics

Additional Superannuation Contribution (ASC) will be introduced with effect from 1 January 2019 and replace the Pension Related Deduction (PRD). ASC is provided for under Part 4 of the Public Service Pay and Pensions Act 2017. Whereas PRD was a temporary emergency measure, ASC is a permanent contribution in respect of pensionable pay. Here are some other important points of information you need to be aware of :

  • Unlike PRD, ASC will only apply to a person who is a member of a public service pension scheme or receives a payment-in-lieu of pension.
  • Unlike PRD, ASC will only apply to pensionable remuneration, so non-pensionable allowances and non-pensionable overtime will not be subject to ASC (whereas they are subject to PRD).
  • PRD was chargeable where remuneration was taxable. Unlike PRD, ASC will apply to all pensionable remuneration whether taxable or otherwise. Thus non-taxable pensionable allowances and emoluments will become liable for ASC.
  • Unlike PRD, ASC is charged at different rates with different threshold bands depending on the pension scheme a person is a member of and the pension terms applying to such membership. Therefore, it is very important that an individual is correctly identified on the system in respect of the relevant pension scheme membership and terms applying.
  • Week 53 scenario – For those payrolls for which there is an extra pay week (week 53/fortnight 27), an extra set of thresholds should be applied in that particular week. That set of thresholds should be added on “Week 1” basis, not cumulative.
  • Like PRD, ASC is chargeable on all pensionable remuneration across multiple pension scheme employers and based on the combined pensionable remuneration in such employments. The procedure for calculating main and subsidiary employments will pertain in respect of ASC as pertained in respect of PRD.
  • There is employer PRSI relief in respect of ASC. However, ASC don’t qualify for employee PRSI relief.
  • ASC will qualify for tax relief, but not Universal Social Charge (USC) relief.
  • ASC will not be included for the purpose of calculating age-related tax relief thresholds.

 

ASC rates and annual earning thresholds

 

The following rates and thresholds apply from 1 January 2019:

 

Member of a standard accrual pension scheme
Annual earning thresholdsRates
Up to €32,000.000%
From €32,000.01 to €60,000.0010%
€60,000.01 and above10.5%
Member of a fast accrual pension scheme
Annual earning thresholdsRates
Up to €28,750.000%
From €28,750.01 to €60,000.0010%
€60,000.01 and above10.5%
Member of the single scheme
Annual earning thresholdsRates
Up to €32,000.000%
From €32,000.01 to €60,000.006.66%
€60,000.01 and above7%

For more details on setting up ASC click here

 


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