Vol. 512 No. 5
87 Mr. N. Ahern asked the Minister for Finance the position with DIRT on the savings of old age pensioners and widows over 66; the process of getting a refund; the persons who qualify; the cost if this concession was extended to all special savings accounts of persons over 66; the cost if extended to all pensioners paying tax at standard rate; and if he will implement these concessions in view of the harsh treatment of pensioners' savings. [26556/99]
The position of the elderly in relation to DIRT deducted from ordinary deposit accounts and special savings accounts is that the over-65's are entitled to a refund of DIRT paid if their total income, including interest income, is below the income exemption thresholds. Concessionary treatment is, therefore, already afforded to these individuals in the administration of DIRT where their income falls outside the tax net. With effect from 6 April 2000, the age allowance, under the income tax code, which is available to taxpayers aged 65 or over is being doubled from £400 per annum single and widowed and £800 per annum married to £800 and £1,600 respectively but will be available at the standard rate of income tax only. The full year cost of this is estimated at £6.8 million. In addition, the standard DIRT tax rate will be reduced from 24% to 22% from 6 April next.
The claim for repayment of DIRT is made after the end of the year of assessment. The individual completes a claim form and sends it, together with the certificates of interest which are issued by the deposit taker, to his or her local inspector of taxes.
The claim form is automatically issued to those individuals who have been identified from the records of the Revenue Commissioners as being likely to qualify for repayment. Forms are also available from all tax offices.
I am informed by the Revenue Commissioners that the latest relevant information indicates that some 23,000 individuals aged 65 and over who were liable to income tax for 1996-97 were identified as having interest income to which DIRT applied. On the basis of these figures it is estimated that if all DIRT deducted from the deposit interest of persons aged 65 and over was repaid regardless of their liability to tax, the estimated cost to the Exchequer would be of the order of £8.5 million in respect of DIRT deducted at the standard rate and £150,000 for DIRT deducted at the rate for special savings accounts which is 20%.
I have no plans at present to introduce proposals for additional modifications of the main features of the DIRT system.
