SSIA Pension question

holmsey

The article below was printed in the Irish Times on Saturday and has to do with pensioners transferring some of their SSIA savings into a pension for themselves.
My dad retired last year and earned less than 50,000 euro. Does anyone know the details of this loophole?
If he transfers 7,500 of his SSIA into a PRSA now and waits a year can he then withdraw 10,000, is it as easy as that????
Or will it effect his current pension at all?

Cheers.


Cowen to scrap €2,500 SSIA bonus for transfers to pension - Dominic Coyle

Finance Minister Brian Cowen will move urgently to address a loophole in legislation providing a €2,500 bonus or people transferring money from their Special Savings Incentive Account (SSIA) to a pension.
The bonus is open to anyone who earned €50,000 or less in the year prior to the maturity of their SSIA. It provides a €1 bonus for every €3 moved from the SSIA to a pension product.

The Minister is acting after it emerged that people who were already retired but under the age of 75 could, technically, access the €2,500 bonus immediately by opening a Personal Retirement Savings Account (PRSA) and then closing it within a matter of days.
The loophole first emerged when Mr Cowen initially announced the provision in the Finance Bill but it was not amended before being passed through the Oireachtas.
A number of PRSA providers refused to open PRSA accounts for pensioners after the revenue threatened to clamp down on any perceived circumvention of the "spirit" of the original legislation.
The Revenue amended its advice following inquiries from The Irish Times.
A spokesman for the Minister said last night that Mr Cowen would introduce legislation "at the earliest appropriate opportunity to ensure that, with effect from today [ Friday], individuals who avail of the Pension Incentive Tax Credit only to withdraw the funds immediately or within one year will not get the benefit of the new initiative".
© The Irish Times