Voluntary Deductions Flashcards
List five possible voluntary deductions
Private health insurance Trade union subscriptions Loan repayments Savings Pensions schemes
What is private health insurance in relation to voluntary deductions?
It is an amount paid to a private health insurer to cover medical expenses if a person gets sick, has an accident or needs an operation
What is a trade union subscription in relation to voluntary deductions?
An amount paid to the person’s relevant trade union to protect employees’ rights and negotiate terms of pay and working conditions
What is a loan repayment in relation to voluntary deductions?
A house, car or personal loan
What is a pension?
A financial plan for retirement
What are the two types of voluntary pension schemes?
Private pensions
Occupational pensions
What is a private pension?
3 points
A person pays contributions into a private personal pension fund for the duration of their working life
On retirement they will receive a lump sum
The amount depends on contributions made
What is an occupational pension?
2 points
A pension fund set up by employers in larger companies
Both the employer and the employee contribute to the fund
What are the advantages of having a pension?
3 points
They compensate for the reduction in income when a person retires
They provide protection to pension holder’s dependants in the event of death, as a lump sum will be paid out
The State provides tax relief on contributions made to pension schemes
