Tony Gregory
Question:77 Mr. Gregory asked the Minister for Finance his response to a letter (details supplied) from a person in Dublin 10 whose husband is on invalidity pension and who feels she has no incentive to do part-time work. [6191/97]
Written Answers. - Tax Liability.
I would draw to the Deputy's attention that I did not receive direct correspondence from the taxpayer in question. However, I am informed by the Revenue Commissioners that the taxpayer and her husband are jointly assessed to income tax. Accordingly their combined income is taken into account for the purpose of establishing their liability to tax. The income received by the taxpayer from her employment is taxable. Her husband is in receipt of an invalidity pension from the Department of Social Welfare. The pension is also chargeable to income tax but is paid gross — without tax being deducted — by the Department of Social Welfare. The method of taxing social welfare pensions is that an amount equivalent to the annual social welfare payment is deducted from the person's-couple's annual tax free allowances.
The couple will have a tax liability in any tax year in which their joint income exceeds the exemption limit — in the current year the exemption limit for a married couple is £7,800 with an additional allowance of £450 for each of the first two dependent children and £650 for the third and subsequent children. However, as the taxpayer did not commence employment until 4 December 1996 and in view of the fact that the couple have a daughter in full-time education, it is unlikely that the couple will have an income tax liability in the current tax year. An amended tax free allowance certificate reflecting this will issue to the taxpayer and any tax deducted by her employer will be refunded directly to her.