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Dáil Éireann debate -
Tuesday, 14 Feb 1995

Vol. 449 No. 1

Written Answers. - Taxable Insurance.

Éamon Ó Cuív

Question:

19 Éamon Ó Cuív asked the Minister for Social Welfare whether he will issue a certificate of payments made for each tax year to every social welfare recipient obtaining a taxable payment in view of the fact that most people are obliged to make tax returns and as such a certificate would be helpful to social welfare recipients. [2992/95]

Income from weekly social welfare contributory payments is treated as taxable income by the Revenue Commissioners. Different taxation arrangements are applied by the Revenue Commissioners for the taxation of short term benefits such as disability, injury and unemployment benefit, and long term benefits such as deserted wife's benefit, old age, retirement and survivors pensions.

The taxation of unemployment benefit is administered by the Revenue Commissioners.This involves tax being collected through restricting tax refunds to unemployed persons; adjusting tax free allowances on resumption of employment; and reviewing the person's tax affairs at the end of the tax year.

The Revenue Commissioners have advised my Department that it is not necessary for unemployed persons to obtain a certificate of payments from my Department.

The taxation of disability and injury benefits is also operated by the Revenue Commissioners with the assistance of employers. In the case of persons in employment, their employers are notified by my Department of the amount of weekly benefit payable. This amount is taken into account by employers in calculating the employee's tax liability under the PAYE system.

In the case of people in receipt of long term disability benefit (i.e. more than 12 months) my Department notifies the Revenue Commissioners of the amount of benefit a person is expected to receive in the tax year. The Revenue Commissioners restrict the person's tax free allowance by this amount. The issue of a certificate of social welfare payments to these people is not necessary.
People in receipt of other long term payments such as pensions are obliged to declare the amount of the payment to the Revenue Commissioners for tax purposes. However, persons whose sole income is derived from a social welfare pension or allowance are not liable to income tax as the annual amount of such income is less than the level of the appropraite tax exemption limits. Approximately 5 per cent of people who received these payments request statements each year — for use by the Revenue Commissioners, local authorities and the Department of Education. Given the level of demand for statements, these will continue to be issued to individuals on request.
I am satisfied that the existing system operates satisfactorily but I will be keeping the matter under review.
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