asked the Minister for Finance if he will introduce a scheme for the provision of duty-free tobacco and cigarettes and snuff for old-age pensioners.
Ceisteanna—Questions. Oral Answers. - Concessions for Old Age Pensioners.
31.
I am not prepared to introduce a scheme on the lines suggested by the Deputy.
Is the Minister aware that old age pensioners in county homes have their pensions paid over to the authorities and have £1 returned to them each week? Would he not consider introducing a scheme such as I have requested for these people?
I do not think a scheme along these lines would be administratively practical but the Deputy can be assured that the Minister for Social Welfare and myself will be discussing the position of old age pensioners and other social welfare classes in the context of the forthcoming Budget.
Is the Minister aware that various Ministers have previously said in this House that it was administratively impractical to provide free transport and free television licences? These are now available and the Minister should seriously consider what Deputy Kavanagh has requested. It should be possible to classify such needs of old people in these institutions.
If the Deputy wants to do something on these lines I do not think this is the best way to do it. I do not think the Deputy is right in suggesting that the question of free transport was ever ruled out.
Deputy Childers ruled it out; it was ruled out as impractical in the last Dáil.
32.
asked the Minister for Finance if he will consider making old age pensioners exempt from income tax.
No liability to income tax can arise in the case of a person in receipt of a non-contributory old age pension; the award of this pension would have been subject to a means test.
A contributory old age pension— which is paid irrespective of the recipient's other income—is, for purposes of income tax, regarded as earned income. But persons whose only source of income consists of a contributory old age pension are not liable to income tax. I would remind the Deputy that a person whose income is wholly earned is not liable to income tax unless the total earnings (inclusive of any contributory old age pension) are—in the case of a single person— more than £332 per annum or more than £565 in the case of a married man. So far as the question is concerned of exempting contributory old age pensions from income tax the Deputy will appreciate that it would be difficult, if not altogether impossible, to differentiate in principle between such pensions and other pensions, particularly where the other pensions are small in amount, and modest incomes from other sources such as investments.
May I take it that the Minister said that the contributory pension is not taken into account for assessment of income tax?
No. A contributory pension is treated as earned income. If a man and his wife have nothing other than the contributory pension they are not liable for income tax.
Does the Minister not agree that the pension was provided by the man himself during his years of working?
That is why it is treated as earned income.
Therefore, should not the person be assessed only on whatever other earnings or income he may have other than the contributory pension? The present system is to assess him on the full amount.
If he has only a contributory old age pension income tax is not payable.
Most people would not be assessed on the normal part-time employment in which they might be engaged at that age, but by virtue of the fact that they have provided a contributory pension they are being taxed in their old age, which is most unfair.
A contributory old age pensioner only contributes one-third but the whole pension is treated as earned. The situation is if he has only a contributory old age pension, or a contributory old age pension with some other small amount, he is not liable for income tax. If he has any other income which renders him liable for income tax then surely the right way to look at it is that his contributory pension is free of income tax and it is the other income which is taxed. There are people living on small fixed incomes and it would not be fair to exclude contributory old age pensioners and not the other cases.
What about people such as school wardens who are in part-time employment earning, say, £6 a week which brings them into the income tax bracket?