diff --git a/ICSharpCode.NRefactory.CSharp/Refactoring/CodeIssues/VariableOnlyAssignedIssues/ParameterOnlyAssignedIssue.cs b/ICSharpCode.NRefactory.CSharp/Refactoring/CodeIssues/VariableOnlyAssignedIssues/ParameterOnlyAssignedIssue.cs
index dd4b617155..bea8b1599e 100644
--- a/ICSharpCode.NRefactory.CSharp/Refactoring/CodeIssues/VariableOnlyAssignedIssues/ParameterOnlyAssignedIssue.cs
+++ b/ICSharpCode.NRefactory.CSharp/Refactoring/CodeIssues/VariableOnlyAssignedIssues/ParameterOnlyAssignedIssue.cs
@@ -57,7 +57,8 @@ namespace ICSharpCode.NRefactory.CSharp.Refactoring
 				var resolveResult = ctx.Resolve (parameterDeclaration) as LocalResolveResult;
 				if (resolveResult == null)
 					return;
-				if (!TestOnlyAssigned (ctx, unit, resolveResult.Variable))
+				if (parameterDeclaration.ParameterModifier == ParameterModifier.Out || parameterDeclaration.ParameterModifier == ParameterModifier.Ref
+				    || !TestOnlyAssigned (ctx, unit, resolveResult.Variable))
 					return;
 				AddIssue (parameterDeclaration.NameToken, 
 					ctx.TranslateString ("Parameter is assigned by its value is never used"));
diff --git a/ICSharpCode.NRefactory.Tests/CSharp/CodeIssues/ParameterOnlyAssignedIssueTests.cs b/ICSharpCode.NRefactory.Tests/CSharp/CodeIssues/ParameterOnlyAssignedIssueTests.cs
index be3a0fc8bd..9c0b5b3162 100644
--- a/ICSharpCode.NRefactory.Tests/CSharp/CodeIssues/ParameterOnlyAssignedIssueTests.cs
+++ b/ICSharpCode.NRefactory.Tests/CSharp/CodeIssues/ParameterOnlyAssignedIssueTests.cs
@@ -57,6 +57,34 @@ class TestClass
 		i = 1;
 		return i;
 	}
+}";
+			Test<ParameterOnlyAssignedIssue> (input, 0);
+		}
+
+		[Test]
+		public void TestOutParametr ()
+		{
+			var input = @"
+class TestClass
+{
+	void TestMethod(out int i)
+	{
+		i = 1;
+	}
+}";
+			Test<ParameterOnlyAssignedIssue> (input, 0);
+		}
+
+		[Test]
+		public void TestRefParametr ()
+		{
+			var input = @"
+class TestClass
+{
+	void TestMethod(ref int i)
+	{
+		i = 1;
+	}
 }";
 			Test<ParameterOnlyAssignedIssue> (input, 0);
 		}