Information Circular No 24/2011Last Minute Additional Voluntary Contributions – AVCs

By General Secretary

If you are a PDFORRA member aged over 50 and planning on retiring from the Defence Forces, you may have an opportunity to increase your tax-free gratuity.  A Last Minute AVC is a Revenue approved mechanism which enables tax payers maximise their tax free gratuity prior to retirement.

 Benefits for PDFORRA Members:              Members of the Defence Forces with 31 years service are entitled to 65 weeks pay related gratuity on their retirement, however revenue gratuity limits provide for 78 weeks.  Therefore last minute AVCs provide personnel aged over 50 years with an opportunity to avail of a maximum of 13 weeks pay related tax-free cash lump sum on their retirement.

 How does the Last Minute AVC Work?      A retiring PDFORRA member aged over 50 makes a single investment in an AVC one month prior to leaving the Defence Forces.  After their retirement the member receives a tax rebate direct from Revenue following the submission of all appropriate paperwork.  A number of weeks later the retired member receives their initial investment less a maximum fee of €100.

 Calculation of Investment and Net Gain:     The following table provides examples of once off contribution figures and net gains.  Please note that members paying tax at 41% will more than double their Net Gain. 

Rank Private Corporal Sergeant CQMS CS Sgt Major
Annual Earnings* 34,799.96 37,551.80 40,830.40 46,898.28 47,597.16 52,480.48
Revenue Gratuity Limit 52,199.94 56,327.70 61,245.60 70,347.42 71,395.74 78,720.72
Actual Gratuity 43,499.95 46,939.75 51,038.00 58,622.85 59,496.45 65,600.60
Scope to Invest 8,699.99 9,387.95 10,207.60 11,724.57 11,899.29 13,120.12
Tax Rebate @ 20% 1,739.99 1,877.59   2,041.52   2,344.91   2,379.86   2,624.02
Less  €100 Charges   100.00   100.00      100.00      100.00      100.00      100.00
Net Gain €1,639.99 €1,777.59 €1,941.52 €2,244.91 €2,279.86 €2,524.02

* Annual Earnings = Line Pay and Military Service Allowance x 52 Weeks. Pay Rates wef 1st January 2010. 

 Members in receipt of Technician Pay, Naval Pay, Flying Pay, Instructors Allowance and Account Holders Allowance may also include these weekly allowances when calculating their once off investment.

 List of Paperwork Required to Accompany AVC Application Form:

  • P60s for the last 3 years, 2008, 2009 and 2010.
  • Letter printed on Unit headed paper signed by your C O outlining dates of enlistment and discharge.
  • Copy of Pension and Gratuity Benefits which can be obtained by contacting Pensions Administration Section, Galway and providing details of your service in the Defence Forces.

 PDFORRA members seeking further information on Last Minute AVCs please contact Martin & Garvan Insurances on (01) 837 9276 or PDFORRA on Freephone 1800 200 250.

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