Dáil Éireann debate -
Thursday, 19 Nov 1998

Vol. 497 No. 1

Written Answers. - Employment and Health Levies.

Noel Ahern

Question:

57 Mr. N. Ahern asked the Minister for Finance the annual yield for the employment training levy and the health levy from retired civil servants and those on occupational pensions; the logic of raising these charges, particularly the employment training levy, against pensioners; and if he will abolish these levies in the forthcoming budget. [24262/98]

Minister for Finance (Mr. McCreevy)

The total yield for the two statutory levies is estimated at £490 million in 1998. However, I am not in a position to provide the Deputy with details of the receipts from statutory levies paid by the groups referred to. Details of such payments by these groups are not recorded separately by the Revenue Commissioners.

In relation to the application of the levies to pensions, it is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. Treating old age pension payments as income for tax purposes, including levies, is essentially a matter of equity.

However, the current arrangements in respect of the health levy and the employment and training levy are more favourable to many pensioners than most taxpayers because the levy is not applicable to their social welfare pension. The total income of medical card holders and recipients of social welfare survivors and widows pensions, lone parents allowance and deserted wives benefit-allowance are exempt from the levies. Furthermore, the low income exemption threshold for the levies now stands at £207 per week, £10,750 per annum, following the last budget. Therefore the levies will apply only where income from other sources is in excess of £10,750 per annum. The existing arrangement ensures that most pensioners on low incomes are exempt from the levies.

While I do not intend to either abolish the levies or to fully exempt occupational pensions from the levies, I can confirm that the position of the levies, including the level of the threshold below which they do not apply, will continue to be reviewed in the context of the annual budget.