Pat Carey
Question:190 Mr. P. Carey asked the Minister for Finance the tax implications for a person (details supplied) in Dublin 11 who is in receipt of a non-contributory old age pension and wishes to return to work. [25802/99]
Written Answers - Tax System.
I am informed by the Revenue Commissioners that the taxpayer is not currently liable to pay income tax.
If the taxpayer returns to work in the current tax year and his total income for the year, including his and his wife's social welfare pensions, does not exceed £13,000, he will not be liable to pay income tax. According to the information available to the Inspector of Taxes, the taxpayer and his wife have social welfare income of £8,466. This would allow the taxpayer to earn a further £4,534 in the current tax year, which ends on 5 April 2000, without incurring an income tax liability.
If the taxpayer's earnings in the current tax year were to exceed £13,000 but not exceed £15,700, marginal relief would apply. Under mar ginal relief, income in excess of £13,000 would be taxed at the rate of 40%. Although this is higher than the standard rate of 24%, the taxpayer would pay less tax than if his liability were to be calculated under the normal system of tax-free allowances. If his total income were to exceed £15,700, marginal relief would no longer be of any benefit to the taxpayer and he would be taxed under the normal system of tax-free allowances.