asked the Minister for Finance if, in view of the fact that a member of her family may not claim a dependent relative or housekeeper allowance in respect of a widow with one or more eligible children on the ground that the income from her contributory widow's pension is too high, he will consider an appropriate amendment of the income tax code.
Ceisteanna—Questions. Oral Answers. - Income Tax Code.
68.
The income limit for purposes of the full dependent relative allowance is £347. Where the relative's income is in excess of that figure, the allowance of £60 is reduced by each £ of the excess over £347. The contributory pension for a widow with one child is £455 per annum and a claim by a taxpayer for dependent relative allowance in respect of her would, therefore, not be due.
There is no income limit in relation to a person in respect of whom the housekeeper allowance is claimed, whether the housekeeper is a relative of the taxpayer or a person employed by him to look after his children.
The income limit for the purpose of the dependent relative allowance was raised in this year's Finance Act from £295 to £347, and I do not have in mind any further increase at this stage. In relation to the type of case which the Deputy has in mind, I might point out that, apart from the question of income limit, the widow would not qualify as a dependent relative unless she were incapacitated by old age or infirmity from maintaining herself.
Is the Minister saying that, where the eldest person in a family wishes to claim for a housekeeper allowance in respect of his widowed mother, it would be granted as there is no income ceiling for a housekeeper's allowance where there are other schoolgoing children in the home?
There is no income ceiling where a person is employed to look after the children.
Is leor nod don eolach.
Is leor.
69.
asked the Minister for Finance if he is aware of the hardship caused to State pensioners, especially those on small pensions, from whom income tax is deducted quarterly; and if he will arrange to have the money deducted monthly.
Monthly advances of pension are so arranged that normally the amount payable in the final month of each quarter is sufficient to meet the tax liability and leave a balance payable, which is approximately equal to the monthly advances. If, however, any pensioner finds that the tax payable by him falls unduly heavy in the last month of a quarter arrangements are made, on request, to reduce the amount of advance payments so as to spread the tax burden more evenly over the quarter.
I thank the Minister for that information. Might I ask the Minister if he would make the good news available to people who are suffering from this regulation or what they think to be the regulation at the moment.
I would hope the people would know that this facility is available. I am not too certain how we could disseminate this information. I think it is fairly well known.
The Minister is doing himself an injustice by not having his kindness of heart publicised.
I feel confident that the Deputy will spread the good news.
70.
asked the Minister for Finance if income tax is taken into consideration when assessing the £2,500 income limit in respect of children's allowances; and, if not, why.
Income tax is not taken into account in arriving at the £2,500 limit for purposes of obtaining a refund of the increases in the social welfare children's allowances because tax payable is not an allowable deduction in computing income under the income tax code.
Is the Minister aware that, in view of his manipulations in the budget whereby the wives received the extra children's allowances, the husbands had to wait some months before they felt the impact of the extra taxation? I know of a case of a man in Guinness's who ended up with a tax slip in his envelope. Is the Minister aware that there is disquiet among the workers?
The answer to the next question will help the Deputy.
71.
asked the Minister for Finance if he is aware of the grave disquiet among workers arising from the clawback of childrens' allowances; and if he proposes to remedy the matter.
The purpose of the reduction in the income tax allowance for children was to obtain a refund through the tax system of most of the increase of £1.50 per month per child given in the social welfare children's allowance where the taxpayer's net income for tax purposes exceeds £2,500 a year. The object was to ensure that the benefit of the increased social welfare allowance would go only to those with lower incomes. I am satisfied that people understand the reason for the restriction is to channel more money towards those in the lower income ranges.
I might add that the full benefit of the increased social welfare allowances has been given to 312,676 families and only about 40,000 families have been affected by the refund arrangements.
I suggest that the Minister did not answer the question put to him. Would he accept that the Irish Transport and General Workers' Union, which represents a considerable number of workers, have expressed their disquiet to him on this matter and have sought the receiving by him of a deputation on it?
The idea of the clawback was first introduced in the budget of 1969 and has been operated ever since without significant complaint, until this year. The reason it was noticed this year was that the children's allowance increases were so substantial that in order to apply the same principle a larger refund had to be obtained. For the first time this year the refund was obtained only from taxpayers who had a net income in excess of £2,500. Until now the refund was obtained from any income tax payer who had an eligible child. This year the refund was only from the people in the higher income group and it did not affect the 312,676 families I referred to.
Is it not true that never, until this year, has a clawback arrangement operated without regard to the number of children in a family? This is the first occasion, I suggest, on which it has operated irrespective of the number of children in a family. As the Minister knows, a man with, say, ten children and £2,600 a year is caught under the clawback arrangement and a man with £2,400 and one child is not. That is the reason why people are so aware of what is happening. For the first time the Minister has introduced a principle totally at variance with the principle of children's allowances.
No. I am afraid that Deputy Colley is misleading himself and the House. The principle applied this year is the same as that which has always applied and there was never a differential related to the number of children which a taxpayer had when a refund was obtained through the tax system of increases given in children's allowances.
Was there ever a figure similar to the £2,500?
No.
That is my point.
Until now the refund was taken from every taxpayer without regard to income. What the Deputy suggests is that there was a variation according to the number of children which a taxpayer had. There was not.
What I am saying is that the Minister introduced a figure of £2,500, with some minor adjustments, irrespective of the number of children. That principle never operated until this year.
It did.
That is why the Minister is having all the trouble he is having.
We cannot have an argument on this matter.
The only change is that everybody below £2,500 was also stung, irrespective of their income.
Question No. 72.
May I have one final supplementary, please? I gather from the Minister that already he has had confirmation of the annoyance and disquiet of a certain number of workers on this matter and that this position has been confirmed to him by the Irish Transport and General Workers' Union and that they have sought to make their case to him on this matter?
I had discussions with the Irish Transport and General Workers' Union and others on the application of this particular way of obtaining a refund from the people in the higher income group and they readily understand the need for it and the way in which it works.
If they accept it, it is all right with me.
Can the Minister say, in relation to the clawback arrangement, if any instructions were issued by his Department about the volume and the manner in which the clawback was to take place? Is he aware that a distress fund had to be opened up in Messrs Guinness in order that people would have some money to take home? As Deputy Lemass said, some people got a pay slip, others got 10p. in their envelopes on a particular day. The result was that a distress fund was opened up into which people will repay at £x per week until such time as the full amount is paid back. Did the Minister or his Department issue any instructions as to the manner in which the clawback was to take place?
The term "clawback" is not to be found in Irish tax law. It is a term which is to be found in the British Exchequer rules and that, I suppose, is why Fianna Fáil use it. I am interested in the Deputy's belated sympathy with Guinness workers because earlier in the year he made an attack on me when through the budget, I made provision to enable Messrs Guinness to pay to workers the wages to which they were entitled under the national wage agreement.
Question No. 72. There can be no more discussion on this matter. The Chair has been very patient and has given every latitude to Deputies. I am intimating to you, Deputy Dowling, that I am passing on to the next question.
Is the Minister aware that a distress fund had to be opened up in Messrs Guinness?
72.
asked the Minister for Finance the number of people affected by the clawback provision in relation to the changes in children's allowances announced in the last budget; and the total amount accruing to the Exchequer as a result of this provision.
It is estimated that of the 352,676 families who received the increased social welfare children's allowances the number of taxpayers affected by the refund provision in this year's Finance Act will be about 40,000 for 1973-74. The amount accruing to the Exchequer from the refund provisions will be approximately £1 million in the current year and about £2 million in a full year. These amounts do not, however, represent a net gain to the Exchequer—they merely recover from people with net incomes in excess of £2,500 a year the increases in the social welfare children's allowances.
The moneys so saved have been used to assist persons in poor circumstances who otherwise might not have received urgently needed benefits.
That is only a trick and a fraud.
73.
asked the Minister for Finance if he will state the amount of income tax allowance in respect of dependent relatives who are (a) in receipt of widow's contributory pension (b) in receipt of widow's non-contributory pension (c) in receipt of contributory old age pension (d) in receipt of non-contributory old age pension and (e) pensioners over eighty years of age.
The tax allowance for a dependent relative is £60 a year. The full amount of the allowance is granted where the income of the dependent relative does not exceed £347. If the income exceeds that figure, the tax allowance is reduced by the amount of the excess. Where the relative's income exceeds £407, no allowance is due.
The particulars requested by the Deputy are set out in a tabular statement which, with the permission of the Ceann Comhairle, I propose to circulate with the Official Report.
Following is the statement:
|
Dependent Relative |
Amount of tax allowance due in 1973-74 |
|
(a) Dependant in receipt of Widow's Contributory Pension |
£60 |
|
(b) Dependant in receipt of Widow's Non-Contributory Pension |
£60 |
|
(c) Dependant in receipt of Contributory Old Age Pension: |
|
|
Single person |
£39 |
|
Married person |
Nil |
|
(d) Dependant in receipt of Non-Contributory Old Age Pension |
£60 |
|
(e) Dependant 80 years of age in receipt of Contributory Old Age Pension: |
|
|
Single person |
£12 |
|
Married person |
Nil |
|
Dependant over 80 years of age in receipt of Non-Contributory Old Age Pension |
£06 |
In all cases, it is assumed that the relative is not in receipt of any income other than the pension specified.
74.
asked the Minister for Finance if he will exempt contributory pensions from income tax assessment as such pensions are paid for during the lifetime of the recipients.
As employees obtain full relief from income tax in respect of their superannuation contributions paid during their years of employment, the answer to the Deputy's question is in the negative.
75.
asked the Minister for Finance when he will announce details of the new taxation system; and whether it will provide for the relief of present PAYE contributors.
I assume that the Deputy is referring to the announcement in my budget statement of proposals for the reform of personal income taxation.
As I indicated, the basic aim of reform is to devise a scheme which will achieve the greatest possible degree of simplification of the basic tax structure at minimum cost to the Exchequer, while leaving broadly unchanged the incidence of the present taxes. If a satisfactory scheme can be devised, I will introduce the necessary legislative provisions at the earliest feasible date.
I do not think the Minister answered my question. He went a little bit around it. I asked when the Minister will announce details of the new tax system and whether it will provide for the relief of present PAYE contributors. The Minister did not reply to that question.
Could we have a supplementary from the Deputy?
I am asking the second half of this question as a supplementary, because it has not been answered.
I would refer the Deputy to the second sentence of my reply.
The Minister did not answer——
The Chair is not responsible for Minister's answers or Deputies' questions.
May I ask a supplementary question? Will the Minister provide relief for PAYE contributors in his new tax system? I have not had an answer to that.
The answer has been given but I might add to what I have already said that any concession is, of course, a matter for the annual budget and it would not be appropriate for me to anticipate what might or might not be in next year's budget.
In other words, the Minister is not answering the question.
The question has already been answered. I am trying to help the Deputy.
Could the Minister say the date or approximate date on which he received the report of the chairman of the Revenue Commissioners upon which the proposed new system of personal taxation will be based?
I have not received such a report.
The Minister has not seen it?
I have not seen the report to which the Deputy refers.
Question No. 76.
Further arising from the Minister's reply——
The Chair has called Question No. 76.
Could I submit——
The Deputy must not try to badger the Chair.
——that there is a balance in favour of Ministers? If a Minister does not give a satisfactory reply——
I have given the utmost latitude to the Deputy. I have encouraged him to ask questions and he has failed to do so.
I have listened to Ministers sheltering under an umbrella and giving half-answers. Could I raise the subject matter of Question No. 75 on the Adjournment?
The Chair will communicate with the Deputy.