asked the Minister for Finance if the small allowances received by the veterans of the War of Independence are subject to income tax; if so, if he will review the position, in view of the meagre amounts at stake, and the very limited numbers of veterans in receipt of these allowances; and if he will make a statement on the matter.
Ceisteanna—Questions . Oral Answers . - War Veterans' Allowances .
25.
: In general pensions and allowances are treated as income for tax purposes but it is only where a person's total income exceeds the total of his or her personal allowances and reliefs that liability to income tax arises. In this connection the increases this year in the personal allowances including age allowance are relevant.
In the cases of those veterans of the war of independence to whom special allowances are payable, it is likely that in most cases there will be little or no liability to tax.
Legislation enacted in 1976 extended the PAYE system of tax assessment and collection to public service classes and other categories including holders of military service pensions and special allowances. Because of practical administrative difficulties, it was not possible to apply the change in relation to military service pensioners until this year. The change has had the result that, in some cases, tax has been deducted provisionally from military service pensions and special allowances. Where refunds are appropriate—as is likely to be the case in relation to any holders of special allowances who may have been affected—such refunds will be made very soon.
The change in tax procedures in relation to holders of military service pensions and allowances came to my notice only very recently. At my request, the Revenue Commissioners are making suitable adjustments to their procedures in these cases so as to obviate any concern or upset.