Vol. 475 No. 7
40 Mr. L. Fitzgerald asked the Minister for Finance if he will give a commitment to include in the forthcoming Finance Bill a provision which gives exemption to pensioners who are senior citizens, in receipt of pensions and paying tax, provided those pensions are under a figure of £20,000; and if he will reduce the lower band for all pensioners who are paying tax. [5736/97]
It is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. In line with this principle income from pensions is, therefore, reckonable as income for tax purposes.
I would draw to the Deputy's attention that pensioners are treated more favourably under the Irish income tax code than the generality of taxpayers. The exemption limits for pensioners are significantly higher than those which apply generally. In the coming tax year these will stand at £4,600 single-£9,200 married couple for those aged between 65 years and 74 years and £5,200 single-£10,400 married at 75 years and over as compared with £4,000 single-£8,000 married for other people.
Alternatively, if taxed under the normal system, a person aged 65 years and over receives a special age allowance in addition to the normal personal allowances. In the budget I announced the doubling of this allowance to £400 single-£800 married from April 1997. Pensioners will also benefit from the increase in the personal allowance of £250 single-£500 married and the 1 per cent reduction in the standard tax rate announced in the Budget. In addition, some pensioners will benefit further from the increase of £500 single-£1,000 married in the standard band.
The income tax improvements introduced in this year's budget will be of considerable benefit to elderly taxpayers. The tax position of the elderly will, of course, be borne in mind in future budgets.
