Pensions payable by the Department of Social Protection (DSP) have always been taxable but the amount of tax payable, if any, depends on the circumstances of the individual concerned, usually whether they have other sources of income. As I have previously informed the House, I have been advised by the Revenue Commissioners that following receipt of data from the DSP in late 2011 containing details of DSP pension payments, it emerged that some pensioners with significant other income had not previously declared their DSP pension for tax purposes. Revenue’s approach was, firstly, to ensure that the record was correct for 2012 and thereafter to examine in detail the largest cases where there was a mismatch between their records and the DSP record, beginning with cases where annual non-DSP income exceeded €50,000. The information obtained from the initial examination would inform Revenue on how they would proceed with other higher risk cases. This follow-up project has been ongoing and Revenue is now corresponding with taxpayers who did not declare their DSP pension where they have annual non-DSP income of between €30,000 and €40,000.
This correspondence, which gives the taxpayer in question an opportunity to engage with Revenue, and, for example, to claim any unclaimed tax reliefs such as medical expenses etc., is in keeping with Revenue’s normal practice. It also provides an opportunity to address the question of ability to pay which can only be determined when the actual liability outstanding has been established on foot of the submission of completed tax returns for the relevant years.