asked the Minister for Finance whether a contributory old age pension enjoyed by a person who continues to work after his seventieth year is subject to income tax; and, if so, whether he will consider exempting such pension from liability to income tax.
Ceisteanna—Questions. Oral Answers. - Income Tax on Old Age Pensions.
19.
The answer to the first part of the question is in the affirmative. Tax would not become payable, however, unless the recipient possessed a considerable amount of other income. I should point out also that contributions under the Social Welfare Acts towards old age pension are deductible in calculating income for tax purposes. As to the second part of the question the Deputy will appreciate that I cannot say in advance what proposals my Budget Statement may or may not include.
Is it not a fact that in previous legislation we have exempted savings up to a certain level from income tax where old age pensions are concerned?
In the case of old people, not pensioners.
Would it not be reasonable that people who have acquired savings by contributions to their old age pensions should at least enjoy an analogous benefit?
That is a matter of opinion. The general rule is that where contributions are free from income tax, the pension itself is taxed.
Would the Minister not agree that it is desirable that if and elderly person can continue in active life, he should be encouraged to do so rather than that he should be encouraged to live on his pension so that his other earnings would not attract income tax? It is surely desirable that if a person is able to go on working and able to do so, he should be helped to do so?
Would the Minister say if a person paid income tax on his contributions for the ten or 15 years before reaching the age of 70 years, the pension would be free of tax?
The contributions are exempt.
That has happened only in the past year.