Which of the following can contribute to a PRSA in the current year?

• A. Self-employed doctor
• B. Working company director whose company does not operate a pension scheme
• C. Homemaker who has never worked outside the home
• D. All of the above

Answer: (A)

The main idea here is that PRSA contributions must come from earned income in the current year in order to qualify for tax relief. In other words, you can contribute to a PRSA and get tax relief only if you have qualifying earnings.

A self-employed doctor has earned income from practice, so they can fund a PRSA this year and receive tax relief on those contributions. A homemaker has not earned income, so there’s no basis for tax-relieved PRSA contributions in the current year. For the working company director whose company does not operate a pension scheme, the absence of an employer pension arrangement can mean there’s no source of qualifying earnings through an employer; if there are no qualifying earnings in the year, they wouldn’t have a valid basis for a tax-relieved PRSA contribution.

So, the self-employed doctor is the clear fit for contributing to a PRSA in the current year.