When an employment ends

Claiming the increased basic lump sum exemption

The increased exemption on lump sums is an additional €10,000. Your employee can receive this exemption if they:

  • are not a member of an occupational pension scheme
  • or
  • give up their right to receive a lump sum from the pension scheme
  • and
  • have not received an amount in excess of the basic tax-free exemption in the previous ten years.

If they are in an occupational pension scheme, this increased exemption of €10,000 is reduced by either:

  • any tax-free lump sum from the pension scheme they are immediately entitled to
  • or
  • the current actuarial value of any lump sum they may receive from a pension scheme in the future.

If the lump sum from the pension scheme is more than €10,000, they will not qualify for the increased exemption. If it is less than €10,000, they will qualify for the increased exemption minus the lump sum amount.

The increased exemption may only be granted once in a ten-year period.

You do not need Revenue approval before including this increase in the basic exemption.

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