Vol. 481 No. 7
179 Mr. O'Shea asked the Minister for Finance if he will exempt from income tax those in receipt of a survivor's pension, particularly those living alone, who are also in receipt of a modest additional pension; and if he will make a statement on the matter. [16821/97]
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 the majority of social welfare payments, including survivors' pensions, are therefore reckonable as income for tax purposes. This means that the social welfare payment is combined with any other income a person might have for tax purposes.
Treating such social welfare payments as income for tax purposes is essentially a matter of equity. The extent to which taxation actually arises in a given case depends, of course, on the amount of other income that the survivor has in the particular tax year. If there is no other income in addition to the social welfare payment, the existing exemption limits and allowances can be expected to ensure that there is no tax to be paid on the social welfare income itself.
The tax position of all taxpayers, including the elderly widowed, will be considered in the context of preparations for the forthcoming budget.
