Taxes Consolidation Act 1997 Schedule 3, paragraph 6

Standard capital superannuation benefit (SCSB)

Schedule 3, paragraph 6 allows an additional deduction — the standard capital superannuation benefit (SCSB) — when calculating the taxable portion of a termination payment, which can significantly reduce or eliminate the amount chargeable to income tax.

• The SCSB is calculated using the formula (A × B ÷ 15) − C, where A is average annual remuneration for the last 36 months, B is complete years of service, and C is the relevant capital sum (e.g. a pension lump sum).
• Where the SCSB exceeds the basic exemption (including any increase of up to €10,000 under paragraph 8), the excess is deducted from the termination payment, further reducing the taxable amount.
• Average annual remuneration includes all taxable emoluments — salary, bonuses, commission, overtime, BIK, employer pension contributions, and benefits under relieved schemes such as the cycle to work scheme and approved profit-sharing schemes.
• A lifetime cap of €200,000 applies to the total exemption available to any individual under section 201(8), regardless of the amount produced by the SCSB calculation.