Vol. 500 No. 4
231 Mr. Perry asked the Minister for Finance the reason a person (details supplied) is in the high tax bracket; if she will be reassessed and entered in a lower tax bracket; if her social welfare insurance on her pension will be waived in view of the fact that she is not entitled to any benefits; if she is entitled to a rebate; and if he will make a statement on the matter. [4099/99]
I am informed by the Revenue Commissioners that the correct amount of income tax is being deducted from the taxpayer's pension. The tax band being applied to the taxpayer is appropriate to her level of income.
As regards the social welfare insurance charge on the taxpayer's pension, this refers to the health contribution and the employment and training levy levies. Since her retirement the taxpayer has not been in insurable employment and she has not made social insurance contributions in that time. However, the taxpayer is liable to pay health levy at the rate of 1.25 per cent and employment and training levy at the rate of 1 per cent in any year where her income is greater than the threshold under which levies are not payable. In the years 1994-95 to 1996-97 the taxpayer's income was below the threshold. In 1997-98 her income exceeded the threshold and this gave rise to a liability to pay the levies. However the amount of levies deducted exceeded the amount payable and the taxpayer can claim a refund of the amount overpaid by applying to the Collector General, PRSI Refunds Section, Sarsfield House, Limerick. The taxpayer's P60 should accompany the application.
The low income exemption threshold for the levies was introduced in the 1994 budget at £173 per week or £9,000 per annum, and was increased in subsequent budgets. At present the threshold is £207 per week or £10,750 per annum. The levies threshold was introduced in order to focus assistance towards those on low incomes.
In the 1999 budget last December, I announced substantial changes in the area of levies. From the new tax year, the employment and training levy will be abolished and the health levy increased, resulting in a net levy of 2 per cent being applied from the 1999-2000 tax year, an overall decrease of 0.25 per cent in the levies. In addition, the threshold was raised to £11,250 per annum, or £216 per week. These two improvements will apply from 6 April next and will cost the Exchequer £63 million in a full year.
