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Annual Report of the Ombudsman 2004

Chapter 4 - Refund of PRSI Contributions

Refund of PRSI Contributions

In recent years my Office has received complaints from a number of people who had been denied a refund of PRSI contributions. While the Revenue Commissioners are responsible for the collection of PRSI payments on behalf of the Department of Social and Family Affairs, a dispute arose between the Revenue Commissioners and the Department of Social and Family Affairs as to which body was responsible for refunding such payments.

My predecessor, Mr Kevin Murphy, had raised the problem with both bodies. I received additional complaints in 2004 concerning reliefs allowable in connection with payment of AVCs (Additional Voluntary Contributions to pension funds). Whereas deductions of the payments at source automatically attract tax and PRSI reliefs, the reliefs must be claimed by the taxpayer in relation to lump sum payments. Refunds of the tax element had been made to claimants, but refunds of PRSI were delayed due to the dispute between the bodies. Approximately 20,000 claimants were affected by the dispute.

Following discussions, the bodies have now agreed an arrangement which will rationalise the current situation and facilitate the processing of applications for the relief. The arrangement agreed is that the Office of the Collector General will administer any applications for refunds arising from payment of AVCs, while the Department of Social & Family Affairs will deal with all other cases of PRSI refunds. These arrangements have been advertised in the national press.

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