Call us on (091) 670 123 | [email protected]

Know your AVCs to boost your 123s!

Fancy growing your final tax-free lump sum, earning additional income in retirement and taking full advantage of the pension tax relief available to you, particularly if you’re at an age where you’re closer to retirement?

If you’re answer is yes, then you really need to know more about doing an AVC.

An Additional Voluntary Contribution (AVC) is the government’s tax back scheme that helps you make the most of your pension contributions by rewarding you with tax back for a one-off lump sum payment.

To qualify for tax back however, you have to make your AVC by 31 October 2019 to claim the tax back for the 2018 tax year.

With the 2019 tax deadline only around the corner, why not take the opportunity to top up your pension savings? Your future self with thank you!

Here’s how it works.

As an example, if you are in the marginal tax bracket (paying 40% income tax) and want to top up your pension with an AVC of €1,000:

– Pension pot topped up with €1,000
– Claim your tax back of €400
– Actual cost to you is €600

Please note that entitlement to tax relief is not automatically guaranteed. You should speak with your advisor first regarding your situation. 

How does the tax back benefit you?

Following the previous example, your pension pot has received the full benefit with a €1,000 top-up. Then, this year you can claim at your marginal tax rate of 40%, giving you €400 back in your pocket in 2019. That means your pension top-up actually only cost you €600, despite your pension being €1,000 healthier.

Did you know?

The scheme provides an additional opportunity for company directors and the self-employed. In an emergency, such as an economic downturn where additional funds are needed to help run a business, the ACV can be accessed on a once-off basis. However, any funds drawn down are taxed at the marginal rate.


Don’t forget, to take advantage of the scheme and make an AVC you must make your lump sum payment prior to 31 October 2019. Individuals who both pay and file their tax returns through the Revenue On-line Service (ROS) have until 14th November 2019 to pay a pension contribution and elect to backdate the income tax relief against the 2018 tax year.

Where to get help.

There are many different options for making an AVC and the process can become complex depending your individual circumstances and whether you have components of defined benefit pensions, defined contribution pensions and AVC’s. On this basis you should speak to your Hennelly Finance who can help you manage the process. Give us a call today on 091 670 123.

Our trusted partners

Where we are

Insurance Brokers & Financial Consultants,
Unit 3B, Tí Phuirséil,
Barna, Co. Galway.
H91 AF1W

Opening Hours

Monday - Thursday: 9am -5pm
Friday: 9am - 4pm
Appointments available outside normal working hours upon request.


Hennelly Financial Services Ltd. t/a Hennelly Finance & Health Insurance Shop is regulated by the Central Bank of Ireland. Directors R. Hennelly. Registered in Ireland, Company Reg No: 327276.
Copyright © Hennelly Finance | All rights reserved