asked the Minister for Finance the reason a person (details supplied) in County Meath has to pay £18 per week tax on his old age pension; and if he will make a statement on the matter.
Written Answers - Tax on Pension.
79.
I have been advised by the Revenue Commissioners that, in addition to a retirement pension, the taxpayer is in receipt of a contributory old age pension. Both pensions are chargeable to income tax. However, the contributory old age pension is paid gross and it is standard practice to collect the tax attributable to it by making an appropriate restriction of the tax-free allowances to be set against the retirement pension for the purpose of calculating the tax to be deducted under PAYE from that pension.
An amended certificate of tax-free allowances was issued to the taxpayer on 7 September 1987. The correct amount of tax by reference to that certificate is currently being deducted from the taxpayer's retirement pension. The taxpayer's liability will be subject to review after 5 April next.